NERC Lifts Temporal Ban On Electricity Tariff Increase

The Nigerian Electricity Regulatory Commission (NERC) has lifted the temporal ban it placed on electricity tariff increment for residential customers nine months ago. The ban was lifted by the commission during a presentation yesterday in Abuja at a public consultation on the minor review of the Multi-Year Tariff Order (MYTO 2.1). The commission disclosed that the moratorium billed to have lapsed by July 1, 2015, would now take effect after distribution companies have completed their own consultations and remodelling of their tariff plan.
According to them, the new indicators in the minor review include inflation 8.3 per cent, up from 7.8 per cent; exchange rate N198.97 to the dollar, up from N166.18; energy sent out from stations 32,921GWH, up from 28,038GWh; revenue requirement N619 billion, up from N572 billion; average retail tariff N23.8, down from N26.8. This new review holds that the wholesale contract price is now N16,263/MWh for new entrant generators while the wholesale contract price for Geregu Power Plc is now 15,794/MWh. By implication, while the energy charge has automatically changed for all categories of consumers except those in the R1 class, residential consumers in the R2 class served by the Abuja Distribution Company may have to now pay energy charge of N18.41/KWh, up from the frozen charge of N14.70. Reeling out the implication of the review, the NERC chairman, Sam Amadi, explained that the new tariff is actually a reduction of what consumers ought to be paying before the commission froze tariff increase for residential consumers. While re-emphasising that the commission’s priority is to protect consumers, Amadi said that the indices used in the review were obtained from official government agencies. According to him, “The data used in the MYTO review is taken from official sources, including the National Bureau of Statistics and the Central Bank of Nigeria. We take the gas price from the NNPC and we take the quantity of generation from the system operator.