Financial Energy Review
Electricity distribution companies have quietly increased the payable by power consumers across the country.
Although most of the Discos did not make this public, power users have kicked against the move, describing it as fleece amidst the harsh economic reality in Nigeria currently.
Reacting to the price hike, a resident of Lagos highbrow estate, Mr. Oye Sola, lamented the increase.
He said, “Electricity tariff is now N72.2 per unit. Another price hike from N66; I suspect they are going to N100. A higher price for poorer services.
Another customer of Ikeja Disco identified as Ola Busari said, “They are just milking us. This is a perfect robbery. Discos need to be checked.
Another Lagos resident named Olojede said, “They increased prices without informing us. There was no official communication to us as our estate representatives.” However, the Nigerian Electricity Regulatory Commission, in its Multi-Year Tariff Order, provides a 15-year tariff path for the Nigeria Electricity Supply Industry with limited minor reviews each year.
It states that reviews are in the light of changes in a limited number of parameters such as inflation, interest rates, exchange rates and generation capacity, and major reviews every five years when all of the inputs were reviewed with stakeholders.
NERC, however, did not announce the latest hike in tariff, which a power distribution company attributed to the regulator on Wednesday.
A Twitter user, Oyibo Ediri, accused the Abuja Electricity Distribution Company that the Disco quietly increasing the power tariff in December, alleging that the firm raised the rate for non-maximum demand customers by N12.65.
“AEDC has quietly increased the cost of electricity. Cost increased from N57.55 in December to N68.2 for tariff band A non-MD. No official statement from @aedcelectricity or @NERCNG on the increase. These people won’t stop to fleece us,” the Twitter user stated.
Replying to the tweet, the AEDC, via its official Twitter handle, @aedcelectricity, explained that the tariff hike was based on the order of NERC.
“Good day, please be informed that the increase in Tariff is in compliance with NERC order,” the Disco stated.
Also, reacting to the response of AEDC, Ediri asked the power firm to provide the current rates approved by the NERC.
“Kindly make the current rates available as ordered by @NERCNG. Thank you,” the Twitter user stated.
Another Twitter user, Justin David, who reacted to the request by Ediri, then said, “We await their response.”
But the Disco did not make any further comment nor did it reply to the requests of the power consumers.
However, the response could not be obtained from the power regulator as of Wednesday. Its officials did not immediately respond to calls and text messages seeking clarification on the development.
But on its website, the NERC explained that one of the primary functions of the commission as contained in Section 32 (d) of the Electric Power Sector Reform Act, 2005 was to ensure that the prices charged by licensees were fair to customers and sufficient to allow the licensees to finance their activities and obtain reasonable profit for efficient operations.
“In pursuant to the authority given under Section 76 of the EPSR Act 2005, the commission established a methodology for determining electricity tariff in the Nigerian Electricity Supply Industry and subsequently issued a tariff order called the Multi-Year Tariff Order that sets out tariffs for the generation, transmission and distribution of electricity in Nigeria,” it stated.
It added, “The purpose of the MYTO is to set cost-reflective tariffs which will allow the power sector to be properly funded and functional.
“It provides a 15-year tariff path for the NESI with limited minor reviews each year in the light of changes in a limited number of parameters (such as inflation, interest rates, exchange rates and generation capacity) and major reviews every five years, when all of the inputs are reviewed with stakeholders.”
Meanwhile, the tariff increase was first observed on the Tariff Band A Non-MD, which was increased from N57.55 per unit in December to N68.2 per unit.
This amounts to about 19 per cent increase in tariff, according to The PUNCH calculation.
Reacting to the development, the National Secretary, Nigeria Electricity Consumer Advocacy Network, Uket Obonga, confirmed the increase in tariff, but stated that it was in line with the MYTO.
He said, “They’re (Discos) are transiting to the new tariff regime that takes effect from January. On January 1 this year, around 4pm, I had over 300 units in my meter, but to confirm whether there is an increment, I had to buy some units online.
“I bought units of N2,000, which is supposed to be about 26 or 27 units, but what I saw there was about 21 units, which is confirmation that there is a tariff increase according to the current MYTO.
“They moved into a new tariff regime on January 1. But there have been other arbitrary increments outside the MYTO regime. However, the one that took effect now is based on the MYTO, as captured in the MYTO 2020 order.”
Also, NERC Chairman, Sanusi Garba, had said during a press briefing said, “We will adjust the rate every six months to take care of the foreign exchange component of costs, and also inflation. This is absolutely a very straightforward thing,”
Although the chairman said the rate might not necessarily be an upward review, the naira continued to depreciate over time.
The spokesperson for Eko Electricity, Ikeja Electric, and Ibadan DisCos, Godwin Idemudia, Ayeni Akinola, and Busolami Tunwase, respectively, declined to comment on the matter. They directed our correspondent to the Association of Nigerian Electricity Distributors.
DisCos umbrella body, the Association of Nigerian Electricity Distributors, Sunday Oduntan, but there was no response. Response sent to a message sent to his line was still being expected as of press time.
