FG Considers Fresh Hike In Electricity Tariff

Nigerians should gear up to pay more for electricity as the Federal Government on Monday said it was con­sidering a fresh hike in electricity tariff to boost the country’s power sector.

The consideration is coming few days after the World Bank report rated the country’s power sector as abysmal.

Nigerian Electricity Regulatory Commission (NERC), the regulator of the power sector, conveyed this in a notice to the general public and industry stakeholders posted on its website, where it stated that it is con­cluding the Extraordinary Tariff Review process for the 11 Electricity Distribution Companies (DisCos).

The commission said the review was pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA).

According to NERC, ex­traordinary tariff reviews are carried out in instances where industry parameters have changed from those used in the operating tariffs to such an extent that a review is ur­gently required to maintain the viability of the industry.

The commission said it would also commence the pro­cesses for the July 2021 Minor Review of the Multi-Year Tar­iff Order (MYTO-2020), which is done every six months.

NERC explained that the reviews would put into con­sideration changes in infla­tion, foreign exchange, gas prices and available genera­tion capacity.

It would also consider Cap­ital Expenditure (CAPEX) required to evacuate and distribute the said available generation capacity in accor­dance with EPSRA and other extant industry rules.

“Further to the above, the commission held series of public hearings and stake­holder consultations in the first quarter of 2020 on the Extraordinary Tariff Review Applications of the 11 Dis­Cos to consider their respec­tive five-year Performance Improvement Plans (PIPs). However, the evaluation of the DisCos’ requests for re­view of the CAPEX proposed in their PIPs could not be con­cluded for the consideration of the commission during the Minor Reviews undertaken in 2020.

“Specifically, Section 21 of the MYTO – 2020 Order provides for consideration of DisCos’ CAPEX application upon further scrutiny and evaluation of the investment proposals,” it said.

NERC said the notice was being issued in compliance with the provisions of EPS­RA, the Business Rules of the commission and the Regula­tions on Procedures for Elec­tricity Tariff Reviews in the Nigerian Electricity Supply Industry.

The commission said it was aimed at soliciting for comments from the general public and stakeholders on the proposed reviews and advised them to send their comments to NERC’s head­quarters in Abuja within the next 21 days.

Reacting, Comrade Chin­edu Bosah told Daily Inde­pendent that it was insensi­ble and cruel for the Federal Government to consider extra margin on electricity when the country is battling infla­tion and other economic ills which have pauperised most Nigerians.

He said the frequent clam­our for the review of electric­ity tariff without correspond­ing value-adding service shows that service providers and the government are mere­ly driven by neo-capitalist ten­dency which would not cater for the needs of the masses.

He recalled the recent in­troduction of service based tariff by the power distribu­tion companies in the country which has resulted in incre­mental tariff for the category of consumers without the corresponding value for the huge bills slammed on them.

He urged the Nigeria La­bour Congress (NLC) and Trade Union Congress of Nigeria (TUC) to beat a re­treat from their unnecessary dalliance with the Federal Government with a view to mobilising Nigerians against the huge bills they pay for electricity in the country.

The National Executive Council (NEC) of NLC had at a virtual meeting last week re­solved to demand that govern­ment in line with the agree­ment signed with organised labour on September 28, 2020 should invoke the clause in the power sector privatisation that provides for a five-year review of the power sector privatisation programme to reverse the power sector pri­vatisation programme and return the sold assets to the Nigerian people.

They said the demand is consequent on the incontro­vertible evidence that the current power sector priva­tisation has failed to achieve any of its set objectives which include improving the quali­ty and quantity of electricity supply to Nigerians, shedding of power sector funding from the government and increas­ing revenue from power sec­tor investment to the coffers of government.

The NEC also called on government to be clear and straight on its engagement with organised labour on the management of electricity tariff, adding that it would not allow government to hide under the guise of “sine die” engagement with organised labour to afflict Nigerians with further increases in elec­tricity tariff.

“Furthermore, the NEC-in-Session strongly objected to the World Bank’s claim that energy tariffs are subsidised by about 70%. The NEC re­called that the privatisation programme for Nigeria’s power sector was at the bid­ding of the World Bank and other Bretton Woods Institu­tions. The NEC called on the World Bank to be courageous enough to admit that its “one size fits all” prescriptions have failed again.

Source: Independent