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N’Assembly halts 40% electricity tariff hike

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N’Assembly halts 40% electricity tariff hike

N’Assembly halts 40% electricity tariff hike
November 17
06:48 2015

 

Over 60 million Nigerians who are connected to the national grid have been freed from the proposed 40 per cent hike in electricity tariff following the failure of the electricity distribution companies (discos) across the country to implement the tariff review last Sunday.
Investigations by New Telegraph revealed that the failure to implement the plan was buoyed by an order, which the National Assembly gave to the Nigerian Electricity Regulatory Commission (NERC) to halt further action on the tariff review. The proposed increase, according to NERC, would be between 21 per cent and 49.4 per cent.
For commercial consumers, the tariff hike is 21 per cent, while residential consumers will pay 49.9 per cent more.Discos have said that the new tariff would cover increase in the price of gas supply and the cost of power distribution to customers in different areas. The House of Representatives Committee on Power, further checks revealed, had written a letter to the NERC, ordering it to desist from going ahead with the tariff hike.
“What NERC did was that it copied all the discos the letter it received from the House committee and this is the major reason that we have not gone ahead with the implementation of the review as expected on Sunday, November 15,” the chief executive officer of one of the discos told New Telegraph after his anonymity was guaranteed.
“The letter is a follow-up to an earlier directive, which the committee gave to NERC and discos to halt any plans to implement the review,” he added. The House had, on November 6, passed the resolution after debating a motion moved by a member from Plateau State, Solomon Baren, summoning NERC and all discos operating in the country to appear before the lawmakers to explain why an upward review of tariff was necessary at a time consumers are complaining of poor electricity supply. In a resolution unanimously passed during plenary, the House further asked NERC and distribution companies to “immediately begin the provision and installation of pre-paid metres to every consumer nationwide.”
Baren submitted that handlers of the power sector and the distribution companies were taking Nigerians for a ride by contemplating another tariff hike when the reality on the ground was that electricity supply had not improved. Part of the motion reads:
“The House further notes that power generation and distribution in Nigeria is in a state of comatose, leading to the closing down of many industries, thereby creating unemployment in our dear country and hampering the development of small and medium scale enterprises.
“That this House, indeed, resolved against further collection of flat rates or service fees by discos, which were termed illegal and not in tandem with best practices. “That NERC had directed discos to comply with the above resolve. That these discos are about devising another way of collecting this money under another guise.”
About two years after the distribution companies took over power distribution in the country, the House argued, they had not added any infrastructure to the sector to warrant frequent tariff hikes. Meanwhile, consumers in the country have continued to oppose plans to hike electricity tariff.
While many people said that such increase is a way of making Nigerians pay more for what they are not consuming with estimated bills, others expressed displeasure about the plan by NERC to increase tariff without meeting with relevant stakeholders and consumers to discuss the modalities. The power companies are seeking increase in tariff across different parts of the country in order to improve their margin.
For instance, the statistics released by the companies’ showed that the rate of increase needed to improve their margin should be 21 per cent for commercial consumers, which covers those doing businesses, 49.4 percent for residential consumers, depending on the location. Other places include Abuja, Benin, Enugu, Jos and Ibadan, where the distribution companies proposed increase of 48 per cent, 61 per cent, 60 per cent, 63 per cent and 56 per cent.
For Ikeja, Kano, Port Harcourt and Yola, the companies proposed 32 per cent, 40 per cent, 46 per cent and 83 per cent increase in tariff. Also, commercial consumers in Enugu are to pay 56.53 per cent increase in the commercial tariff category, Jos, 30.01 per cent, Ibadan, 18.64 per cent, Ikeja, 25.02 per cent, Kano 46.93 per cent, Port Harcourt, 10.99 per cent, Yola, 43.16 per cent and five per cent increase for consumers under Eko disco distribution area.

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