Nigeria power supply: New electricity rate coming this week

The Nigeria Electricity Regulatory Commission (NERC) has said a new electricity tariff will be ready this

week.

NERC said at a workshop in Abuja that a final regulatory meeting would be held this week to conclude the process.

Its Chairman, Dr. Sam Amadi, said the regulator had met with Discos to finalise their tariff proposals.

He said the commission had got feedback from government and the Discos.

“We have gone to the Discos, got feedback, gone to government and got feedback. We have not finalised. In our view, we have basically done the crunching of numbers.

“It is not about tariff increase, it is also not about their financial outlaw. We have done the technical work, remaining the regulatory work. By next week, we should sign off on the new tariff.”

NERC also noted that the revenue shortfall that accumulated with its freezing of the Residential 2 (R2) class tariff earlier in the year when it approved a cost-reflective tariff in the Multi Year Tariff Order 2.1 (MYTO) would be incorporated in the new tariff to enable the operators recover their cost of supplies to consumers.

One of its tariff and rates officials, Aisha Mahmoud, in her presentation, said: “We calculated the shortfall accruing to the freeze of the R2 and we incorporated it in the tariff because that’s part of the revenue of the operators and they have to recover it one way or the other.”

“So, the Discos have now included it because we said it is their tariff. So, it is part of the tariff going forward,” Mahmoud added.

Amadi said the commission would soon begin verification of accumulated debts owed to Discos by Ministries, Departments and Agencies (MDAs) as well as military and police barracks, among other security formations.

According to the Discos, the debts owed for supply of electricity to these classes of consumers have risen to impact on their operations.

Amadi said: “The last government, through the SGF, gave instructions directing that the Accountant General’s Office should be deducting at source when we wrote and complained about huge debts.

“Since then that has not effectively been implemented. But right now in the new tariff we have discounted those MDA debt from their collection losses with the commitment that it will be paid and government is working on that.”

“And the last time we were at the National Assembly, we proposed to the House of Representatives a strategy that could in the future prevent any future accumulation of debt from government agencies.

“We said they should adopt the earmark strategy in the US, which means each MDAs budget should have clear earmark for paying electricity bills and those earmarks means you put in conditions that the money cannot be used for something else, if used for another thing it would mean a violation of the law.

“Also, as part of oversight function, the National Assembly can now demand certificates of compliance to be sure they have paid the bills. Each of the Discos have sent us how much they are being owed, a verification will be done to ascertain the bills and NERC will present a plan of paying the debt,” he said.

Source: thenation