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Electricity Tariff Hike Looms As NERC Set For Another Review

Ebuka Daniel

There are indications that Nigerians may be expected to pay more for electricity as the Nigerian Electricity Regulatory Commission will soon review electricity tariffs to reflect inflation, foreign exchange, gas prices among other costs.

Nigerians currently pay an average of N25.29 per kWh for households, while businesses pay an average of N39.83 per kWh. 

The Commission had in June last year fixed the rate when it approved the commencement of second round of MAP procurements by Discos to meet up with their roll-out plan for closing the metering gap.

But on Monday, NERC said that the extraordinary tariff reviews are done 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.

NERC said, “This notice is issued to inform the general public and industry stakeholders of the Commission’s intention to conclude the extraordinary tariff review process for the eleven discos.

“As well as commence the process for the July 2021 minor review to consider changes in inflation, foreign exchange,  gas prices, available generation capacity.”

The Commission said the review is being done in line with the provisions of the Electric Power Sector Reform Act.  

According to the Commission, the review is also expected to reflect the capital expenditure required to evacuate and distribute the said available generation capacity in accordance with EPSRA and other extant industry rules.

It stated, “Further to the above, the commission held a 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.

“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.

According to the Bank’s Power Sector Recovery Programme Opinion Research Fact Sheet, access to meter and electricity tariff has remained a nationwide concern, as respondents were dissatisfied with the metering system.

The report stated, “There should be a significant improvement in service delivery before the increase in tariff. 

“The majority of respondents are unaware of the key policies and activities of government and operators. Electricity theft and vandalism are major issues and impact significantly on the quality access to power supply.”

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