MAN, Hoteliers, Others Reject NERC’s Proposal on Tariff Review 


By Chineme Okafor and Nnenna Akuma in Abuja

Top electricity consumers in Nigeria comprising the Manufacturers Association of Nigeria (MAN), Nigeria Electricity Consumers Advocacy Network (NECAN), and Hotel Owners Forum Abuja (HOFA) yesterday rejected a proposal by the Nigerian Electricity Regulatory Commission (NERC) to review electricity tariff in the country on a monthly basis.

The consumers who were unanimous in their rejection of the proposal, said at a stakeholders’ consultation organised by the NERC in Abuja to discuss the possibility of a monthly minor review tariffs that review of tariff should be either done annually or be left to remain bi-annual as it is now.

Also, an analysis of comments received by NERC from consumers on the tariff review frequency, indicated that most consumer groups rejected a higher review frequency.

NECAN, in its submission, noted that any increase in the review frequency would greatly affect electricity consumers, while MAN noted that the monthly or quarterly review and implementation of the tariff would be detrimental to the manufacturing sector.

The Chairman of NECAN, Tomi Akingbogun, said the last tariff review resulted in over 95 per cent rise.

He urged the federal government to protect the interest of electricity consumers as well as requesting the NERC to ensure that customer enumeration and adequate metering is done by electricity distribution companies (Discos) before implementing any tariff review.

On his part, HOFA President, Eze Ude, said the rates for hotel and other sectors were not reviewed monthly, and as such electricity rates was not an exception.

“It will not be fair to the end users to raise tariff either monthly or quarterly,” Ude stated.

Some of the Discos that were present at the meeting – Eko and Ibadan, however supported the monthly review, saying their energy invoices were paid monthly and as such tariff should reflect the changes from energy payments.

Also speaking through their association – the Association of Nigeria Electricity Distributors (ANED), the Discos said monthly review of electricity tariff was a global practice.

An official from ANED, Mr. Adetunji Adeyeye, said the NERC could devise means of implementing it quarterly or annually.

For the electricity generation companies (Gencos), Dr. Joy Ogaji, the Executive Secretary of the Association of Power Generating Companies (APGC), said NERC should factor into the MYTO review about 2,000 megawatts (MW) of electricity that is stranded within the Gencos and which cost is borne by the Gencos.

But despite the consumers’ rejection of the proposal, the Vice Chairman of NERC, Mr. Sanusi Garba, said in his address that the consultation was simply to consider changes in the frequency of tariff review by the commission.

Garba, explained that the exercise was not about increasing the current tariff used by the market, but to check the various indices in the tariff and proffer a better period for review and implementation.

In a presentation made at the consultation, the NERC said parts of its concerns with the Multi Year Tariff Order (MYTO) 2015, was the rise in foreign exchange from N198 to over N300 without a reflection of such changes in the tariff.

It explained that this had resulted in revenue shortfall in the electricity market, in addition to reduction in power generation from gas constraints and vandalism of assets.

The commission also noted that the macroeconomic indices in the tariff were impacted, adding that while the previous tariff was computed on an 8.05 per cent inflation rate, inflation however rose to about 18 per cent afterwards.

On the implementation of the tariff after the review, a former Managing Director of the Nigeria Bulk Electricity Trading Plc (NBET), Mr. Rumundaka Wonodi, said tariff should be reviewed monthly but implemented quarterly.

Wonodi, said NERC should create a stabilisation fund to bridge the gap between the review and implementation time so customers do not feel the shock instantly.

Meanwhile, the Transmission Company of Nigeria (TCN) has appointed 11 focal persons to liaise with the Discos in an effort to resolve and minimize technical challenges, expand the load and promptly attend to distribution interface issues experienced in the market.

A statement by the General Manager of TCN, Mrs. Ndidi Mbah, yesterday, stated that the management of the company had approved the appointment of persons. It explained that they would work with the Discos to ensure they take more power to their consumers.

The statement explained that the move was part of efforts to increase power delivery to distribution load centers nationwide, adding that the focal persons will work with the Discos daily to immediately resolve operational challenges that relates to the transmission network.