Power Ministry Discusses Electricity Tariff Increase

The Ministry of Power has cleared the air on a possible electricity tariff increase in the country.

The Nigerian Electricity Regulatory Commission (NERC) had previously announced that it is set to introduce another tariff review for the 11 distribution companies (DisCos). The review is expected to commence in July.

The Commission adduced the planned increase which it posted on its website to increases in inflation, foreign exchange, gas prices, available generation capacity and capital expenditure.

However, the Minister of Power, Sale Mamman took to his Twitter handle on Saturday to announce that instead of significant electricity tariff hike, Nigerians should expect increase in efficiency in the sector.

The announcement from by the Minister, Engr. Sale Mamman@EngrSMamman:

Fellow Nigerians, There is NO plan to significantly raise Electricity Tariffs!

“Instead of significant hike in electricity tariff, Nigerians should expect an increase in efficiency in the sector to reduce tariffs while managing headwinds from foreign exchange and inflation.

“The review planned by @NERCNG is in accordance with Section 76 of the Electric Power Sector Reform Act of 2005. The tariff for customers on service bands D & E (customers being served less than an average of 12hrs of supply per day over a period of one month) remains subsidised in line with the policy direction of the Federal Government.

“Section 76 of the Electric Power Sector Reform Act of 2005 provides clear guidelines for the periodic review of tariff (based on market data and submissions from licensees). The guidelines include the provision that the Commission shall give notice of activities related to tariff.

“The Multi-Year Tariff Order (MYTO) per NERCs regulation obtains inputs from operators in the market every 6 months to perform minor reviews and a major review is required every 5 years. Thus, as in January a minor review will occur in June.

“Given the timing for the Extraordinary review has also elapsed, a review will occur for consideration in January 2021, The Buhari administration remains faithful to the adopted resolutions from the Joint FGN-NLC/TUC Technical Committee on Electricity Tariffs which makes recommendations for “NERC to conduct an extraordinary review of the MYTO to further review factors and align them with current current evolving realities.

“The reason this recommendation was posited by the Committee was to ensure that efficiencies could be derived from an extraordinary review to further reduce tariff. Government is committed to increasing supplied energy to the grid through rapid expansion of infrastructure through the various facilities for the sector either to the DISCOS under strict terms or to the Transmission Company of Nigeria.

“Furthermore, the National Mass Metering Program is on course to reduce losses. To date more than 500k meters have been delivered to DISCOs in phase 1 of the program in 5 months (this exceeds the progress done for the entire MAP scheme).

“We will eliminate the metering gap during the life of this administration. This administration is not unaware of the challenges that Nigerians face which is why govt has continued to subsidise the band D and E consumers to pre-Sept 2020 rates (55% of grid connected customers).”

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