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Suspending new electricity tariff will lead to darkness, say DISCOs


electricityFirms give condition for reduction

THE umbrella body of the 11 electricity distribution companies (discos), Association of Nigerian Electricity Distributors (ANED), yesterday reacted to the directive from the Senate ‘suspending’ the new electricity tariff.

The association warned that suspending the implementation of the tariff would leave the country in continued darkness, with diminished and no future prospects of growth of the economy.

Besides, the discos said the new tariff would guarantee adequate investments in the sector, which would ultimately lead to a reduction in tariff in the future.

Meanwhile, Executive Director, Advocacy and Research of the association, Mr. Sunday Oduntan, in a statement yesterday, also cautioned that the absence of a market priced tariff would create the possibility of performance failure by the operators.

The statement said: “The Senate on Tuesday, February 16, 2016 passed a resolution directing the Nigeria Electricity Regulatory Commission (NERC) to suspend the recently-implemented electricity tariff (MYTO-2015).

“However, implementation of this resolution is not without consequences and the following are a few of them. A market priced tariff is a fundamental requirement under the agreements signed between distribution company (disco) operators in the Nigerian Electricity Supply Industry (NESI) and the Bureau for Public Enterprises (BPE), raising the concern for sanctity of contract.

“Such a failure will be at a price that the government can ill-afford in these times of die economic challenges.”

Oduntan, who noted that failure of the sector would result in, among other things, loss of employment and livelihood for approximately 50,000 Nigerians, indirect job losses from factory and other business closures, possibly in the millions, stressed how this would discourage further investments in the development of gas reserves and production for local consumption.

“A market priced tariff is critical to address decades of under-investment (for instance, the five million metering gap) in the sector.

“Worldwide electricity reforms have always been tied to increased investment, resulting in improved production efficiency. Such investment is predicated on access to capital, which will be jeopardised in the absence of a market priced tariff.

“The absence of a market priced tariff will endanger the viability of the entire value-chain of distributors, generators, transmission and gas suppliers, resulting in the failure of the sector”, he further said.

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  • We have been in darkness erstwhile. A proper rethink is now required to get this matter right once and for all if possible!!

  • Ohadoma Prince Ikechukwu

    Bunch of heartless fellows! Get us prepaid meters and do ur tariff increase. Better still increase the bills on prepaid meters while you provide meters for other Nigerians who don’t have. Why subject Nigerians to untold hardship over a matter that concerns our basic need.

  • Lemmuel Odjay

    A market priced tariff that relies mostly on accruals from bills arbitrarily dispensed without commensurate power supply is nothing short of fraudulent. Increased investment which leads to improved production efficiency must take to heart the interest and convenience of the end user.

    Agreed nowhere in the world is electricity cheap, but fairness and commonsense would suggest that we should install meters on every building before graduating to any tariff increase regime. Apparently the MYTO 2015 arrangement did not consider the importance of metering before tariff increase. There is need for a MYTO 2016 that should address the important issue of metering as well as the need to bring the Discos to operate like real private companies, not government agencies out to dispense favours. There must be positive change in the power sector before profit and satisfaction could be realized by all the stakeholders involved.

    • amador kester

      The power sector portends in every ramification the most monumental, state– endorsed mass extortion in nigerian history.

  • emmanuel kalu

    pure rubbish and yet another blackmailing by this power sector. yes market rate traffic is important for this sector, but not when it is not supported by accurate and reliable measurement of the product. if Disco want to call in the contract signed, they would be at a huge disadvantage, because they have completely failed to follow their contract. They were supposed to meter the nation, they haven’t done it. They were supposed to invest in the sector, they haven’t done it. The new traffic should not take effect until they have metered the nation. The country provided them over 200 billion naira in loans to meter and invest in the sector. They are yet to that, yet they want to continue to loot Nigeria for providing darkness. This is the total failure of NERC, because they could have directed the Discos that new rate only take effect after meter have being provide to each consumer. in other words, after each consumer has being properly and totally meter, only then can the new rate take effect.

  • Maigari

    The NERC has wittingly or unwittingly opened the ever changing Tariff gap for the DISCOs. Thus they have the backing of the supposedly “neutral” arbiter to charge whatever catches their fancy in theme of market tariff. What investments have any of the DISCOs made from the start of this charade to date as against the constant and ever increasing Tariff regime? If they want to charge Nigerians fair enough but at least have the honesty to invest, provide meters to all consumers so that we can calculate the tariff ans determine our consumption not this NERC imposed “market tariff charade. It is shocking that PMB did not consider the NERC for a new leaf, it is a drag on the Electricity future.

  • Olajohnny

    Which darkness? The one we are already in or another one

  • Uchenna Ugokwe

    Please what ever agreement is reached let there be no more fixed charge. The fixed charge is wicked.