NERC, Reps differ on Feb 1 power tariff hike

12 January 2016, Abuja – The Nigeria Electricity Regulatory Commission, NERC, and the House of Representatives have remained resolute on their different opinions regarding the take-off of the new electricity tariff, scheduled for February 1.

Energy Crisis Threatens the Western Power GridsThe Chairman House Committee on Power, Hon. Daniel Asuquo, told Vanguard  that the House position on the tariff increment has not changed, despite NERC’s insistence to go ahead with the increment as planned.

According to Asuquo, “the House position on the tariff increment has not changed because there is a Committee constituted by the House to investigate and report back to it. That committee has not submitted its report for the House to deliberate on it findings.”

He noted that the Minister for Power, Works and Housing, Mr. Babatunde Fashola, had sought the House understanding for a quick roll out of the new tariffs to help stabilise the market and attract investments.

But he said: “Our advice was that there should be appropriate consultation with the Nigerian populace and clear agreements entered with the Disco’s (distribution companies) and other critical players in the value chain.

“Nigerians should know what investments have been done by the new owners and what the expectations are if the tariffs are agreed, with time lines for delivery of better service etc,” he added.

Recall that a Federal High Court sitting in Lagos, had some months ago, restrained NERC from implementing the planned new electricity tariff, while the House had also ordered the Commission to suspend the move until it has concluded investigations into activities of operators in the sector.

The Ad-hoc Committee investigating the activities of Electricity Distribution Companies, DISCOs, in a letter many weeks ago and addressed to NERC, reminded the Commission of previous communications in which it was agreed that further actions be suspended regarding review of electricity tariff in Nigeria.

Consumers rallied for support: But commentators on the issue urged consumers to support NERC if the increment will bring about sustainable electricity delivery.

The Director General, Lagos Chamber of Commerce and Industry, LCCI, Mr. Muda Yusuf, said it is difficult to fault NERC and the Minister’s claim that the proposed tariff review is a major plank of the power sector reform and critical to electricity delivery.

According to him, “It is difficult to fault the position of the regulators and the Minister of Power over the quest to make electricity tariff cost-reflective in order to make investments in the sector attractive and sustainable especially in the light of the clamour by the citizenry for a private sector driven power sector.

“In any event, it will still be cheaper (even with the review) than individual firms or households providing electricity through generators powered by diesel, petrol generators or LPFO. However, electricity consumers should not be made to pay for inefficiency or corruption costs.”

Muda argued that it is important to evaluate the elements of the current costs especially the integrity of procurement processes and other operational expenditure under the current dispensation, given the prevailing risk of bloated costs which should be addressed.

Operational expenditure

Similarly, the Managing Director, Energy Solutions Ltd., Mr. Yomi Kolawole, insisted that the increment will enable the DISCOs replace dilapidated and obsolete equipment like non-functional transformers and cables.

Kolawole urged consumers to cooperate with the government by allowing the new tariff to commence, while commending NERC for the removal of the monthly fixed charges from electricity bills, saying they are fraudulent.

Also commenting, the Chairman, Iponri Housing Estate Housing Residents’ Association, Alhaji Abdul-Rasak Osho, argued that the increment is good if power supply would be made available.

“If we should consider the amount of money spent to fuel our generators on daily basis, we will see that it is better to pay more on regular electricity supply than to pay what we are paying and no light.  We should give the present government the benefit of doubt by allowing the new tariff to commence.”

  • Vanguard
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