Outrage As FG Orders Increase In Electricity Bills

Outrage and a note of caution are trailing the proposed hike in electricity tariffs approved by the Nigerian Electricity Regulatory Commission (NERC).
Effective from April, eleven Power Distribution Companies (DisCos) will adjust their tariffs upwards.

The Abuja DisCo will collect N47.09 per unit, up from N27.20 it current charges.

The Ikeja DisCo in Lagos State will take N36.92 as against N26.50 while Enugu DisCo will hike its tariff to N48.12 from the extant N25.11.

The directive signed by the regulator’s chairman, Prof. James Momoh and Secretary, Dafe Akpeneye, gave approval to the DisCos to implement new tariffs for  different categories of customers, excluding those  in the residential category.

The level of increase, which differs from one DisCo to another, according to NERC, will based on consideration of the actual changes in relevant macroeconomic variables and available generation capacity as at October 2019.

NERC said the new rates will enable DisCos to generate enough revenue to pay cost of power production by all the segments of the power supply value chain, including gas producers/suppliers.

Sunday’s statement by NERC General Manager, Public Affairs, Mr Usman Arabi, clarifying the hike, said: “The attention of the NERC has been drawn to the publication in several electronic and print media that end-user electricity tariffs have been increased following the approval of the minor review (2016 – 2018) of the 2015 Multi Year Tariff Order (MYTO)on Aug. 21, 2019.

“The commission therefore wishes to notify the general public that no tariff increase has been approved by the commission vide the order.

“We wish to provide guidance that the minor review implemented by the commission was a retrospective adjustment of the tariff regime released in 2015.

“This is to account for changes in macro-economic indices for the years 2016, 2017 and 2018 thus providing certainty about revenue shortfall that may have arisen due to the differential between tariffs approved by the regulator and actual end-user tariffs.”

The Lagos Chamber of Commerce and Industry (LCCI) said it believes that  tariff hike would not solve the nation’s power problem.

It told NERC that any approach to overcoming the challenge in the sector must be holistic to protect consumers.

“The power sector problem is a multifaceted problem.  It is not only about the tariff. The approach should be holistic, otherwise the consumers would be vulnerable.  Only recently there was an increase.  Now another is being proposed,” said LCCI Director-General,  Muda Yusuf.

He added: “The tariff question is no doubt one of the problems. But what is NERC doing about the issue of the capacity of the Discos, estmated billing, the technical  and commercial losses, metering problem, quality and adequacy of investment by the discos ,  the transmission issues,  the proposal on the decentralisation of the sector, the promotion of off grid solutions and incentives for renewable energy solutions?

“All of these need to be addressed in order to inspire the confidence of consumers.  NERC should protect the interests of consumers as well as that of the investors.  There is also the social dimension of electricity provision to those at the bottom of the pyramid.

“It is also critical to disaggregate and interrogate the components of cost being claimed by the discos. Already many small businesses have complained about prohibitive tariffs by discos following the last review.

“What is needed is a holistic reform rather than the simplistic solution of tariff review.”

National President, Energy Consumer Rights and Responsibilities Initiative, Sural Fadairo, noted that increasing the cost of electricity was not the panacea to Nigeria’s energy crisis.

He said, “If they want to increase tariff because the distribution companies are under, remitting due to debts by consumers, that will not solve the problem.

“If people are refusing to pay now because they are disputing their bills, will they now pay if it is further increased?

“What they need to do is to meter all electricity customers so that we can end the issue of estimated billing.

“So, from the consumer point of view, we are totally against any increment because power generation and supply have not improved significantly in the country.”

National Coordinator, All Electricity Consumers Protection Forum,   Mr Adeola Samuel-Ilori,  said the increase was totally uncalled for in all ramifications.

He said: “The basis for such increase at this time can’t be justified in that consumers have not been metered and they still purchase transformers and other line materials by themselves with attendant extortion via estimated billings.

“All these are not taken into consideration and extensively dealt with before contemplating tariff increase.”

National Coordinator of HURIWA, Emmanuel Onwubiko and National Media Affairs Director, Miss Zainab Yusuf, believe the upward review of electricity cost would worsen mass poverty in the country.

They said the Federal Government should focus on how quality education could be delivered to millions of the Nigerian children returning   to school  in the next few days.

They added, ”The Buhari-led administration should also be focused on restoring security of lives and property which is the primary duty of government and for which it has failed to discharge instead of rushing to introduce the wicked policy of electricity tariff hike in January of a fresh decade.

“HURIWA believes that this is the most reckless policy to be imposed wickedly on the Nigerian people who are currently going through some of the most primitive and painful economic adversity in about 40 years.”

To the PDP, the increase in electricity cost was draconian, provocative and obnoxious.

The party charged the Federal Government to immediately rescind the decision and consult further with Nigerians before any such tariff hike.

“It is lamentable that Nigerians, who are already suffering the devastating negative impact of the recent increase in the Value Added Tax (VAT) from five percent to 7.5 per cent by the APC administration, are now being further suppressed with increased electricity tariff,” it said in a statement by its spokesman, Kola Ologbondiyan.

“Our party holds that the increase in electricity tariff, under the prevailing harsh economic conditions, is injurious to the wellbeing of Nigerians as it will further stress the productive sector and lead to an upsurge in the cost of regular and essential goods and services, including food, medicine, housing, education and other critical needs,” the party added.

The Association of Nigerian Electricity Distributors (ANED) said it was studying the tariff increase before it could come out with a clear stand on it.

ANED, which is the umbrella body of DisCos, said Nigerians must brace for a cost-reflective tariff in order to expect efficient power supply.

”We are studying the increase and will come out public with our position tomorrow. We would address the media on the issue on Monday (today) as it is a very sensitive issue, which must not be rushed to dissect in the interests of Nigerians,” it said through its Executive Director, Sunday Oduntan.

”If Nigerians want efficiency from the power sector, they must agree that the price of electricity should reflect the cost of production,” he added.

To the Managing Director, PowerCap Limited, Biodun Ogunleye, the increase was   capable of stimulating growth in the power sector.

He said, “The increase in tariff would help in improving supply of electricity. However, the government made a mistake by not attaching some conditions to the increase in tariffs in terms of performance by the DisCos. Conditions such as improvement in power generation, distribution and transmission should have been attached to the issue.

“But it is not too late as owners of the assets would know that they are not out to make free money. They have to justify the increase in tariff by providing electricity to Nigerians.”

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