Electricity tariff hike suspension extended by 7 days

The Nigerian Electricity Regulatory Commission (NERC) said it has notified the 11 Distribution Companies (DisCos) to ‘stay action’ on implementing the hike in tariff of September 1, 2020 which was suspended until last Sunday. Chairman of NERC, prof. James Momoh in a telephone interview on Monday, said based on the outcome of a meeting by […]

The Nigerian Electricity Regulatory Commission (NERC) said it has notified the 11 Distribution Companies (DisCos) to ‘stay action’ on implementing the hike in tariff of September 1, 2020 which was suspended until last Sunday.

Chairman of NERC, prof. James Momoh in a telephone interview on Monday, said based on the outcome of a meeting by the Federal Government and members of the organised labour late Sunday night, there is a one week window for NERC and the power sector stakeholders to implement all resolutions before the tariff is resumed.

 

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However there will be multiple discounts to cushion the effects of COVID-19 pandemic on households and businesses.

“[Tuesday] we are going to sit (with stakeholders) and agree on the recommendations and present our actions on what we are asked to do.

“What we have asked the DisCos for now is that they should please don’t change the tariff. They should stay action. I wrote a letter to them when the labour meeting was held at the villa on Sunday, so they should not start changing to the former tariff course.

Why we say it is that if they do it and it is done wrongly, then there will be a problem. The exact amount of what they are going to change it to has to come from us – the regulator,” Prof. Momoh emphasized.

“NERC cannot do it overnight; so the purpose of this week is for those things to be done and to do it well, then we will communicate to them and the whole world will know that we have done the right thing that the government wants us (NERC) to do.”

On what power consumers should look out for, he said: “The rates will still remain for the customers in Band A, B and C. Remember that categories D and E are frozen with no change (hike). But for the A to C, there will be a discount or palliative to each of the customers.

“So instead of maintaining the September 1 tariff increase, we have asked DisCos to go back to what it was before September until when we now direct them to give the customers in those classes, discount. So the government’s money will be put in those bands to cushion the effects. How to put that clear to the DisCos is what we are preparing now,” the regulator explained.

The two week suspension of the September 1 tariff hike which ended on Sunday, has been extended by seven days, with the new but reduced tariff expected October 18, next Monday.

A work plan jointly adopted by the federal government and members of the organised labour late Sunday night, indicates that, from next Monday, the tariff hike will continue but with a reduction by about 10 percent across customer categories A to C that were earlier affected.

The document sighted by our reporter indicates that the one week extension was to ensure that some resolutions were implemented before continuing with the tariff hike.

One of such resolutions is that NERC will immediately create strategies to protect the salary of electricity workers.

Based on the Value Added Tax (VAT) generated in the electricity market, NERC will compute a 10% cut in the suspended Service Base Tariff (SBT) for Band A customers (those who have 20 hours and above daily power supply), 10.5% reduction for Band B (16 to 20 hours) and 31% reduction for Band C (12 to 16 hours) customers. This computation will form the basis of the new tariff from next Monday.

The federal ministry of power will urgently work with NERC, CBN, the Nigerian Electricity Management Services Agency, NEMSA, and the DisCos to quickly deploy at least 1 million meters to customers from Monday till December 2020 while the DisCos are compelled to meet the 6m target period.

Two ad-hoc technical committees were created: the first co-opted the GMD of NNPC, Mele Kyari to review pricing of gas to power; NEMSA’s MD, Peter Ewesor is part of the second committee to immediately implement the 1m metering, all from October 12 to December 12, 2020.