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Published On: Mon, May 26th, 2014

Electricity consumers to pay N750 as Fixed Charge from June 1st

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Chairman-NERC-Dr-Sam-AmadiBy Etuka Sunday

Electricity consumers would be required to pay a reduced fixed charge of N750 from June 1st instead of the N1500 stipulated in the Multi Year Tariff Order (MYTO) for 2014.

The Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi who made the disclosure at the weekend said, “Many customers by 1st June should be paying a Fixed Charge (FC) of about N1500 but the adjustment has resulted in a decrease in that the fixed charge will not change but will remain at the N750,” Amadi explained.

He said that various favourable indicators including a single digit inflation rate, improved foreign exchange rate at current N157 per dollar and stagnation of gas-to-power price at $1.80 against the projected $2.50 were resultant factors for the decrease.

On the Energy Charge for the 2014 MYTO Amadi said, “The Energy Charge (EC) would have been much lower if we got all these favourable indicators and there is increase in generation capacity which may make average cost of power to be less.

“What we will see is that most of the consumers did not have any increase in their EC apart from Residential Two (R2) customers that have N1 increase in some places.

So instead of having a much more bigger Energy Charge (EC) increase that was published for 2014 MYTO since 2012, we now have the same fixed charge of N750 from the supposed N1500 which means a huge reduction and then a slight increase of about N1 or so for only R2 customers,” he said.

He noted that R2 customers in Ikeja Distribution Company (Disco) are more in a cluster so the cost is cheaper, “and when they calculated the average with the cost of price, their energy charge came down lower.”

Amadi who stated that reviews are done by benchmarking the real cost incurred by each Disco maintained that NERC’s review principle is not to allow over recovery or under recovery of investments by Discos but is a rule-based approach that gives confidence to the investors and

also protect consumers against arbitrary charges.

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