NERC may shift February take-off date for new electricity tarif

05 January 2015, Lagos – There are strong indications that the Nigerian Electricity Regulatory Commission (NERC) may shift the February 1, 2016 take-off date for the implementation of the new electricity tariff to a later day, THISDAY’s investigation has revealed.

Babatunde Fashola, Minister of Power, Works and Housing

Mr. Babatunde Fashola, Minister of Power, Works and Housing

The plan to potentially postpone the implementation of the new tariff, THISDAY has learnt, stemmed partly from the sustained opposition by the House of Representatives to the tariff hike and the sudden expiration of the tenure of office of the Chairman of NERC and other commissioners shortly after the approval of the new tariff regime.

THISDAY gathered from sources within NERC that with the position of the law makers, coupled with the expiration of the tenure of office of the officers in charge of the regulatory agency, it will be difficult for the career staff of the commission to resist the law makers and defend the new price regime.

The House of Representatives had resolved that NERC should not embark on any upward review of tariff, until it concluded its probe of the power sector, particularly the privatisation programme.

However, the regulatory agency apparently ignored the resolution of the House and went ahead to review tariff by 45 per cent.

The NERC sources told THISDAY that though the price hike was a business decision, it also has political implications which could be better defended by officers, whose appointments are also political.

“The House is vehemently opposed to the increase and saw it as an affront to the legislature because it violated their earlier resolution. They now want to deploy all their legislative fireworks against the commission to frustrate the increase. I doubt if our career staff can face any political intrigue and defend the new price. So, at best, the implementation can wait until the agency settles with the House or a new chairman and other commissioners are appointed to take up the matter with their fellow politicians in the legislature,” one of the NERC officials explained.

Another source insisted that the increase was purely a business decision devoid of political considerations but added that since the issue affected the masses, political implications could not be ruled out.

“Many factors –both internal and external-were considered before arriving at the new tariff and there was no political consideration, whatsoever. Some of the factors include cost of production of electricity, efficiency of the distribution company, cost of foreign exchange and cost of gas. So, there was no political consideration but purely business decision,” the source said.

The source noted that when the law makers see all the variables and deliverables that necessitated the hike, they will see things from the point of view of the commission.
“But how soon the House will sit with competent representatives of the commission to settle the rift is not certain and this may delay the implementation of the new tariff,” he said.

The lower chamber has planned to summon NERC immediately it resumes session to explain why it embarked on the review in flagrant violation of its resolution.

However, it is expected that with the strong backing by the Vice President, Prof. Yemi Osibanjo and the Minister of Power, Works and Housing, Mr. Babatunde Fashola, the agency will successfully push its agenda before the law makers.

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