By Etuka Sunday
Barely two months after the Nigerian Electricity Regulatory Commission (NERC), implemented a much opposed electricity hike in November 2020, it has again approved over 50 per cent hike in electricity tariff payable by customers of the 11 Distribution Companies, DisCos.
Going by the revised Multi Year Tariff Order (MYTO) signed by the new Chairman of NERC, Engr. Sanusi Garba, on December 30, 2020, and sighted Tuesday, the new tariff increase took effect on January 1, 2021, and supersedes the previous Order NERC/2028/2020.
In the new Order NERC/225/2020, the commission said it considered the 14.9% inflation rate rise in November 2020, foreign exchange of N379.4/$1 as of December 29, 2020, available generation capacity, US inflation rate of 1.22% and the Capital Expenditure (CAPEX) of the power firms to raise the tariff.
The revised Service Based Tariff (SBT) also saw increase in the rates payable by all classes of electricity users unlike the one of November 2020, that exempted low power getters.
This is effective till June 2021 while a Cost Reflective Tariff (CRT) expected to raise the new cost higher will be activated from June to December 2021, the NERC Order revealed.
Daily Trust had reported that in December, 2020, NERC notified that it had begun a review for another tariff amended which has been completed and had taken effect from January 1, 2021.
Recall that NERC had raised tariff for the DisCos in September but that drew outrages from customers and the organised labour, promoting the federal government to suspend it while parties dialogued.
By November 1, 2020, the suspended tariff was implemented after some discounts were given for customers who get 12 hours and above power supply daily. However, those with less than 12 hour supply did not get a tariff hike, according to the NERC order of November 2020.
Meanwhile, in a swift reaction, NERC confirmed that it adjusted the tariff from N2 to N4.
The commission in a statement by its management said “The Commission hereby state unequivocally that NO approval has been granted for a 50% tariff increase in the Tariff Order for electricity distribution companies which took effect on January 1, 2021.”
On the contrary, it noted that 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 frozen and subsidised in line with the policy direction of the FG.
However NERC said: “In compliance with the provisions of the EPSR Act and the nation’s tariff methodology for biannual minor review, the rates for service bands A, B, C, D and E have been adjusted by NGN2.00 to NGN4.00 per kWhr to reflect the partial impact of inflation & movement in forex.
“The Commission remains committed to protecting electricity consumers from failure to deliver on committed service levels under the service-based tariff regime.”
NERC called on DisCos’ customers that have been impacted by any rate increases beyond the above provision of the tariff Order to report to the Commission.