Tariff: Electricity distributors threaten darkness

20 July 2016, Abuja – Insisting that the decision of a Lagos Federal High Court to outlaw the 2015 electricity tariff used by electricity distribution companies (Discos) to supply power to electricity consumers across the country was not in the interest of the sector, the 11 Discos on Tuesday said Nigerians would have to choose between working with them to improve the country’s electricity system for their benefits and going back to darkness which they said had been the situation long before they took over from the government.

*Power transmission lines.

*Power transmission lines.

The Discos said through their association, the Association of Electricity Distribution Companies (ANED) at a press briefing in Abuja that even with the 2015 tariff which the law court disbanded last week, it was still quite difficult for them to operate and meet the demands of consumers in their networks.

They also stated that public electricity services in the country would have to be priced appropriately for steady investments and improvements to be recorded, hence its decision to respect the Lagos court judgement; file for a stay of its execution; and then appeal against it at a higher court.

The Executive Director for Research and Documentation of ANED, Mr. Sunday Oduntan alleged at the briefing that the Nigerian Electricity Regulatory Commission (NERC) knew that the 2015 tariff was inadequate to attract investment in the sector because it is not absolutely cost reflective.

He said NERC and the government have for more than two years failed to live up to the agreement it reached with the Discos that a cost reflective tariff will be allowed in the sector to attract investments into it.

He noted that with the current situation, financial institutions in the country are already cutting back their investments in the sector, a situation he said would impact on the Discos’ network expansion plans.

“Nigerians have an option between light and darkness. If we need darkness, let us continue the way we are going now. Let’s continue to say they should reverse the tariff, let’s continue to steal energy, let’s continue to vandalise gas pipelines, let’s continue not paying our bills.

“If we continue, darkness looms, if we can change we can increase the power supply. We can progress gradually from incremental to stable to uninterrupted power supply, but we can’t achieve this without the cooperation of everybody.

“Inappropriate tariff leads to shortfall, shortfall leads to funding gap and funding gap leads to inefficiency, because we will not be able to give appropriate service,” said Oduntan.
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