Electricity tariff: Consumers to pay 66% higher from April

By Simon Echewofun Sunday

The Nigerian Electricity Regulatory Commission (NERC), the federal government agency regulating the power sector, has announced a proposed hike of electricity tariff by 66 percent, about N46 for every kilowatt of electricity from April 2020 across the 11 power Distribution Companies (DisCos).

In a notice for an extraordinary review of the Multi Year Tariff Order (MYTO) released by NERC, from April to December 2020, Nigerians will begin to pay N46 per kilowatt hour (kWh) of electricity to DisCos.

NERC said this is what it will, allow DisCos to collect instead of the actual N53.4/kWh Cost Reflective Tariff (CRT).

However, from January 2021 to December 2021, consumers should expect to pay an average of N50.3/kWh.

Analysis of the breakdown of the proposed tariff starting from April indicates that at Abuja DisCo, Residential customer 2 (R2) has been split into six classes. R2 will pay N24.30 until 31st of March 2020.

From April, R2 Single Phase prime will pay N37.65, R2 Single Phase Core will pay N33.61, R2 Single PH Others will pay N31.26.

The R2 Three PH prime will pay N39.98, R2 Three PH Core will pay N35.38, R2 Three PH Others will pay N33.61. Also, R3 customers that pay N47 now have been split into three classes and will pay between N67.23and N60.88.

Commercial customers that are paying N47 will be paying between N67.86 and N44.42.

In Lagos, Ikeja DisCo has two R2 customer classes paying N21.30 and N21.80. From April, these two classes tariff will jump to N31.95 and N32.70. Its commercial tariff will jump from N27 and N38 to N40.80 and N57.21.

In the South-South, R2 customers of Port Harcourt DisCo pay N32 but will soon begin to pay N48 and N50 for the new two classes of R2. The commercial customers will be an average of N55, rising from an average N40.

In the Eastern states, customers of Enugu DisCo in twoclasses of R2currently paying N31 and N34/kWh will soon begin to pay as high asN46 and N51. The Commercial customers paying around N32 average will by thenpay N55 average tariff rate.

In the Northwest, the two classes of R2 customers pay N22 and N29 but they will begin to pay N38 and N43 from April 2020. The commercialcustomers will pay up to N40 average as against the current N30 average tariffper kilowatt hour.

Why we’re raising tariff – NERC

NERC in the document called for comments from consumers forthe extraordinary review of the tariff ahead of a public hearing by NERC.

Statistics in the NERC document also show that by January 2020, the average payable tariff for electricity should be N53.4 but due to the impact it could have on consumers, the DisCos are allowed to collect just N30.7 leaving a shortfall of N22.7 for every kilowatt hour (kwh) of electricity consumed.

NERC said the implication of this shortfall was that the DisCos had had underpaid monthly invoices settlement. It said this remained the situation until the federal government provided a loan, Payment Assurance Facility (PAF) to the Nigerian Bulk Electricity Trading Plc (NBET) to enable it clear invoices for energy and capacity to the GenCos.

Between 2017 and 2018, government gave N701 billion PAF, it gave another N600bn to cover January 2019 to March 2020. Thus, the total tariff-related revenue shortfall for the power firms from 2015 to 2019 has been N1.72 trillion, the records revealed.

To end the regime of government loans, NERC in theconsultation paper declared that, “In order to mitigate the impact of rate shock on consumers, it is proposed that the gradual increase shall commence onApril 1, 2020.”

Daily Trust reports that NERC does a minor review of the Multi Year Tariff order (MYTO) every six months and ought to do a major review once every five years.

The extraordinary tariff review after the 11 DisCos and theTransmission Company of Nigeria (TCN) applied for such to review some factors.The review will recognize the new classes of customers DisCos are adding intothe MYTO.

Once implemented, a DisCo would only be given the energy they can pay for and other DisCos who want to take excess allocation would begiven incentives to do so. This may help to reduce cases of load rejection by DisCos.

Consumers fume over proposed tariff hike

Some electricity consumers have reacted to the proposed hikeof current rates by 66 percent.

When contacted, Mrs Maria Ochube, a commercial residentin Tudun Wada area of Kano State expressed dissatisfaction over therevelation.

Her grouse with Kano DisCo is about the poor power supply.”If the electricity supply situation has improved, we can bear the newcost but things are getting worse,” Mrs Ochube lamented.

Expressing similar view, Uche Ogah, a resident of Nsukka town in Enugu State said the Enugu DisCo should first provide meter to all customers before raising the cost of electricity.

Ogah said, “It is not fair on the consumers who are mostly on estimated billing in this region. If they raise any tariff, we will march out in protest.”

In Lagos, Julius Omenka who resides in Ojota axis under the Ikeja DisCo was hopeful for better service improvement. “I hope this time they will give us better supply because they have exploited us for long. Theincrease of 66 percent is just too much at this period,” he told our reporter on telephone.

Metering consumers was still a focal point raised by Isaac Yusuf who resides in Mararaba town of Nasarawa State. Mr Yusuf who is servicedby Abuja DisCo said his compound applied severally to be supplied meters but tono avail.

He urged the Federal government to urge the DisCos toprovide meters to customers before they increase the tariff by April.