28 September 2011, Sweetcrude, Abuja – The Nigerian House of Representatives may oppose the plan by the National Electricity Regulatory Commission to hike electricity tariffs in January 2012.
The House yesterday at a plenary seession referred to its Committee on Power, a motion calling for the suspension of the hike of electricity tariffs.
The motion was brought before the House by Hon. Faparusi Bamidele and is entitled: “Need to suspend the increases in electricity tariffs.”
Rep. Bamidele, while moving the motion, questioned why the NERC is in a haste to raise tarriffs when N117 billion has been made available to the Federal Government for subsidies under the Multi-Year Tariff Order (MYTO), which was meant to ensure orderly transition from subsidy to market determined price of electricity.
He noted that there was no basis for increasing the tariffs on electricity as the NERC has failed in ensuring that service providers are efficient in customers complaint handling, connection and disconnection procedures, customer service standards of performance and meter reading.
The lawmaker noted that a total of N43.9 billion has been released for distribution to beneficiaries under the subsidy arrangement and hence there was no need for a hasty hike in tariffs as planned by the NERC.
“Nigerians, especially the poor continually pay the power Holding Company of Nigeria (PHCN) for unmetered connection with no service for over 70 per cent of the time,” he noted.
According to him, the Multi Year Tariff Order (MYTO) provides for a 15-year tariff path for the Nigerian electricity industry, with limited minor reviews each year in the light of changes in limited number of parameter (such as inflation and gas prices) and major reviews every five years when all the input are
reviewed with stakeholders.
“The Multi-Year Tariff Order (MYTO) implementation which stated in July 2009 is based on the assumption that power generation output will be around 10, 000 megawatts by the end of 2009 and that combined technical, non-technical and collection losses will have dropped from 45 per cent to 30 per cent.
He said it was worrisome that NERC has introduced the last schedule of the 2008/2013 regime of the Multi-Year Tariff Order (MTYO) with effect from 1, July, this year.