The commission said changing the tariff update period to monthly or quarterly would allow operators to recover their efficient cost promptly without delay thereby boosting market liquidity. “Electricity consumers will immediately bear the full brunt of risks associated with macro-economic changes in the economy,” it stated.
“Several years after the country’s power sector was privatized, millions of Nigerian households particularly the socially and economically vulnerable sectors of the population continue to complain about outrageous bills for electricity not consumed, and poor power supply from distribution firms.”
The federal government plans to recover the $7.6bn fund by way of hiking the present electricity tariff outlined in the Multi-Year Tariff Order (MYTO) 2015. It has therefore considered four options and the Working Group is making a decision on which of the hike options to adopt shortly.
“Regardless of the international pricing of gas in dollars, Nigeria should price its own product in such a way that it will not be affected by International Monetary Fund, World Bank and Organisation of Petroleum Exporting Countries pricing template.”
The government promised to pay on this basis after receiving the report on the audit of debts owed to Discos by MDAs by the verification team which estimated the debts to be N59.3 billion. “The report stated that all verified bills will be recommended for payment on a first come, first served basis,” it said.
“The N701 billion fund approved by the Federal Executive Council (FEC) is necessary but not sufficient intervention for resolving the liquidity challenge in the power sector. Other regulatory interventions would be enforced by the regulatory commission,” he said.
It added that, employing efficient power generation technologies, swifter execution of power projects with maintenance and replacement of failing infrastructure were other recommendations that could help to achieve effective growth of the sector.
The AEDC’s action runs contrary to the Federal Government’s directive that distribution companies should not disconnect estates, communities and local governments over debts owed by individual customers.
NERC added that it is the customer’s right to be notified in writing ahead of disconnection of electricity service by the electricity distribution company serving the customer in line with NERC’s guidleines.
He said that pricing methodology mandated the commission to carry out a minor review of the tariff bi-annually and adjust the exogenous factors that were beyond the control of the investors and the regulators.
