Customers Kick As NERC Rolls Out New Tariff
Govt Talks Tough
With the increase in electricity tariff, effective from last Monday, stakeholders in the power supply chain will now be held responsible for their inaction and low performance, the Nigerian Electricity Regulatory Commission has said.
The acting Chairman, of the commission, Anthony Akah, said last Wednesday that henceforth, no electricity user should be expected to buy electric poles or transformers in any part of the country, just as all homes are expected to be metered within stipulated period of time.
He said after the expiration of the required time for metering, resident should reject estimated billing, adding that the customer would not be disconnected until the conflict is resolved.
Speaking with The Guardian during the week, Akah said, in line with the Commission’s regulation on meter reading billing and collection, as well as, connection and disconnection regulation, all new connections must be done strictly on the basis of metering before connection. Any unmetered customer, who is disputing his estimated bill would not be expected to pay the disputed bill. He would only pay his last undisputed bill as the contested bill goes through the dispute resolution process
Akah said NERC was working on the development of a strategy and operational methodology for the effective implementation of the Power Consumer Assistance Fund. This, he said was being established to ensure that indigent members of the society have access to electricity.
He defended the tariff, which he described as a remedial regulatory action to the myriad of challenges of regular power supply, adding that it would make the Distribution and Transmission segments of the NESI viable for the execution and effectiveness of contracts in the Nigerian electricity Supply Industry (NESI) value chain.
“We want the sector to attain credible cost reflective tariffs by unfreezing R2 tariffs and recognizing revenue shortfall that resulted from the freeze in the DISCOs tariffs going forward from year 2016; reviewed ATC&C (less Ministry, Department and Agencies (MDA) debts recognised in Discos’ tariff and relevant shortfalls accounted for in the tariff from 2016 onwards.”
He said penalty now awaits stakeholders in the power supply chain, who refused to comply with performance contracts agreement after the take off of the new tariffs.
“DISCOs shall be penalised for rejecting supply based on its load allocation. Where a DISCOs does not take its allocation for any reason other than System Operator’s (SO) instructions, DISCOS shall compensate TCN for arttributable loss in revenue. DISCOS will also be compensated by TCN for imbalance in revenue resulting from TCN’s inability to deliver allocated energy due to transmission grid constraints.
“TCN and Discos will be penalized for delays in delivering capital expenditure projects provided for in the tariffs. All willing customers who paid for CAPMI meters must be metered within the time stipulated in the Commission’s resolution or not billed after the 60 days time limit for metering. In the period after the expiration of the 60 days such customers cannot be disconnected.”
The director of Research and Advocacy for the Association of Nigerian Electricity Distributors (ANED), Barrister Sunday Olurotimi Oduntan told The Guardian, few days ago that the Discos had been grappling with the problem of poor access to financing due to non-reflective tariff.
According to Oduntan, the effectiveness of all stakeholders in the electricity supply chain is related to cost reflective tariff.
“Unfortunately the required investments that will significantly turn this situation around (from the value chain) are hinged on tariffs that must be reflective of all costs over the price control period. The challenge is to find the right balance in setting tariffs that allow for the required investments and yet at levels customers will be willing to pay as the power situation improves. A huge deficit arises that needs to be financed to keep tariffs below cost,”
For the Power, Works and Housing Minister, Babatunde Fashola, “The surest way not to have power is to oppose the implementation of the Tariff Order.”
And in apparent agreement with tariff increase agitators, the Nigerian Electricity Regulatory Commission (NERC) announced a new set of tariffs that consumers of electricity will now pay.
Over 60 per cent of the tariff paid by customers goes to power generation companies (GENCOs), 11 per cent to the Transmission Company of Nigeria (TCN), four per cent to other stakeholders, while dstribution companies retain 25 per cent.
The Multi Year Tariff Order (MYTO) 2015 Distribution Tariffs (2015-2024) which contains the new tariff structure, gave the exact electricity bills to be paid by consumer under different DISCOs.
Under the new tariff, R2 customers covered by the Abuja Electricity Distribution Company (AEDC), who currently pay N14.70 per kilowatt-hour (kWh) this year, will have an increase of N9.60. This means that they will pay N24.30 per kilowatt-hour from February 1, 2016.
By NERC’s classification, R2 consumers are residential customers with single or three phase meters. They are further classified as residential apartments.
We want the sector to attain credible cost reflective tariffs by unfreezing R2 tariffs and recognizing revenue shortfall that resulted from the freeze in the DISCOs tariffs going forward from year 2016; reviewed ATC&C (less Ministry, Department and Agencies (MDA) debts recognised in Discos’ tariff and relevant shortfalls accounted for in the tariff from 2016 onwards
Consumers covered by the Ikeja electricity distribution areas, which before now were paying N13.21 kWh will pay different rates from February 1. Those with single-phase meter will pay N21.30kwh, just as customers using triple phase meter will pay N21.80. Ikeja DISCO covers Abule Egba, Akowonjo, Ikeja, Ikorodu. Oshodi and Shomolu.
Consumers covered by the Eko Disco, who have been paying N15.63kwh will henceforth pay different rates according to the new tariff regulation. While single-phase customers are expected to pay N24.00 kwh, those using three phases will start coughing out N25.79 kwh.
Eko Electricity Distribution Company covers Lagos Islands, Ajah, Ibeju Lekki, Ikoyi, Mushin, Ebute – Meta, Ijora, Badagry, Festac, Apapa and Surulere.
Single-phase meter electricity consumers in Kaduna, Sokoto, Kebbi and Zamfara covered by Kaduna DISCO, who currently pay N17.00kwh will now pay N26.37kwh, while those with three phase meters will now pay N28.05 kwh.
Single-phase meter consumers under the Benin DISCO will pay N24.08 kwh, while those with three phase will pay N24.45kwh. The two classes of consumers currently pay N14.82 kwh. Benin DISCO covers the states of Edo, Delta, Ondo and part of Ekiti.
The same R2 consumers under the Yola DISCO territory, who have been paying N15.00 will now pay N23.25kwh (for single-phase meter users) and N24.75 for three-phase meter users. Yola DISCO covers Adamawa, Borno, Taraba and Yobe States.
For the Port Harcourt DISCO, all R2 customers in Rivers, Bayelsa, Cross River and Akwa Ibom states will now pay a flat rate of N24.91kwh, instead of N15.09 kwh they are currently paying.
Under the Kano DISCO, consumers in Jigawa, Kano and Katsina states with single- phase meters will now pay N20.26kwh an increase of over N3. They are currently paying N16.01. Those with three phase meters who currently pay N16.01 kwh will now pay N26.41 kwh.
For Plateau, Gombe, Bauchi and Benue covered by the Jos DISCO, customers will pay N26.93kwh under the new tariff regime. It increased from the current N16.75kwh.
Electricity consumers under Enugu DISCO, which covers Abia, Anambra, Ebonyi, Enugu and Imo State, those in R2 class will pay a flat rate of N27.13 regardless of whether they are on the single phase or three phase meter type. They currently pay 16.44kwh going by NERC’s calculations.
The electricity consumers under Ibadan DISCO R2 covering Kwara, Ogun, Osun, Oyo and parts of Niger State will now pay N24.97kwh, an increase from N16.11kwh under the previous schedule.
Commercial consumers across the country also have different levels of increase. While some will have increase of N12.08, others tariff will increase by N13.35.
For instance C2 consumers under the Enugu DISCO coverage will now pay N42.40kwh. They currently pay N29.05. C3 consumers will pay N42.97kwh an increase from the current N29.05. C2 and C3 consumers are described as consumers, who use their premises for any other purpose other than exclusively as a residence or as a factory for manufacturing of goods.
R1 class of residential consumers won’t witness any change in their tariff structure. They will continue to pay N4kwh till the year 2024. R1 consumers are considered the lowest income class, who live in residences with electricity lifeline of 50kwh. Their monthly consumption is considered to be below 50 kilowatts.