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NERC set to increase electricity tariff on Wednesday

NERC set to increase electricity tariff on Wednesday

Nigerians will from Wednesday, April 1, 2020, pay more for electricity.

The Nigerian Electricity Regulatory Commission had disclosed this in its December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020.

The decision to increase tariff had not been suspended despite the lockdown occasioned by the COVID-19 pandemic.

A top source at Ikeja Electric said that the firm had not received any directive from NERC as regards reversal of the plan.

He said, “According to the tariff order for the year, we are supposed to increase on April 1, 2020. So far, we have not received any directive not to go ahead.”

 

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Efforts to get NERC to speak on the matter were not successful on Monday as Usman Arabi, the spokesman for the commission, said he was not around but on a course at the National Institute for Policy and Strategic Studies.

Arabi’s substitute, however, did not respond to calls or a text message sent to him.

NERC had disclosed in its December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 that the order was issued to reflect the impact of changes in the minor review variables in the determination of cost-reflective tariffs and relevant tariff and market shortfalls for 2019 and 2020.

The commission said the order also determined the minimum remittances payable by the distribution companies in meeting their market obligations based on the allowed tariffs.

It said, “The Federal Government’s updated Power Sector Recovery Programme does not envisage an immediate increase in end-user tariffs until April 1, 2020, and a transition to full cost reflectivity by end of 2021.

 

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“In the interim, the Federal Government has committed to funding the revenue gap arising from the difference between cost-reflective tariffs determined by the commission and the actual end-user tariffs payable by customers.”

According to NERC, all Discos are obligated to settle their market invoices in full as adjusted and netted off by applicable tariff shortfall.

It said, “All FGN intervention from the financing plan of the PSRP for funding tariff shortfall shall be applied through NBET and the market operator to ensure 100 percent settlement of invoices issued by market participants.

“Effectively, this order places a freeze on the tariffs of the TCN and administrative charges until April 2020 at the rates applied in generating MO invoices for the period of January to October 2019.”

 

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