Power: Ex-NERC boss blames poor information about tariff structure for hike controversy

*Sam-Amadi, ex-NERC boss.

*Sam-Amadi, ex-NERC boss.

…Says over 2 million Nigerians lack meters

Oscarline Onwuemenyi

23 February 2016, Sweetcrude, Abuja – The immediate past chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi believes the public’s ignorance about the tariff system and general operations in the generation and transmission of electricity has complicated the discussion around the recent hike in electricity tariffs.

Amadi who was speaking in an interview in Abuja, however, noted that it was the job of the regulator to enhance consultations between the Distribution companies (Discos) and the consuming public towards ascertaining the impact of tariff hikes or otherwise.

While commenting on the recent protest against electricity rates hike in the country, Amadi disclosed that the Discos had during the last tariff review resisted the regulator’s decision to throw open the process and allow consumers and other stakeholders participate in the rates review.

He added that the regulator however refused and ensured that consumers were carried along in the entire consultation but that residential consumers were quite ill-informed of the entire process.

“Rate making is a game of contestation. Discos come with their figures, NERC verifies and the consumers should controvert. So, we set up this nicely by saying to the Discos, don’t come to us, until you had done consultations and they did. And we sent our staff there.”

“Now, I can’t guarantee the rigour of those consultations, I can’t guarantee whether consumers got prepared and thoroughly looked at the figures but what I can presume from the reports which the zonal officers sent in including videos, pictures, audio and recorded written scripts of what happened, I see clearly there was a case of don’t increase.

“Now, if you say you do not want increase it does not mean NERC will agree with you. We made it clear that the consultation is not to say consumers will veto the tariff process. We have a decision to make whether tariff is appropriate, justified or not. We only provided mandatory consultations so that consumers can actually engage Discos to look at their figures to predicate their charging any fee based on service they are going to provide,” Amadi explained.

He further stated: “What I can say is that those consultations held, the Discos did not want them but we forced them and the Discos felt bad that I had to ask them to do extra-consultation. We also did our own consultation.”

Amadi said that the consumers’ advocacy platform in Nigeria was still weak, lacking in knowledge, and critical skills to really close down on the Discos and help the regulator do a better job of balancing opposing interests.

He explained that the NERC had to improvise in the absence of such opportunity, to remain impartial in its job.

“In the absence of those skills we have done our best to reduce the tariff and at a point we marked down on the tariff and said you cannot increase it beyond this level and we pushed some of the recoveries to future dates, therefore, making the tariff lower than it could have been,” he said.

Amadi further said that the last regulatory audit of the metering gap in Nigeria’s power sector showed that up to two million electricity consumers are yet to be provided with meters by the electricity distribution companies (Discos).

He explained that that the metering audit by the NERC was done in December 2015 preparatory to the conclusion of the new tariff review. He however noted that the gap can be bridged through multiple creative means, which include government subvention and private investments.

According to him, such subventions or investments in bridging the metering gap would have to be backed by the regulator.
“We still have like two million meters backlog by the last assessment. The metering gap can only be closed by investments mandated by the regulator, recovered through tariff but spread out over the years. But government can help now by making investments,” said Amadi.

About the Author