Consumers kick as Aba Power seeks N240/kWh tariff increase

Electricity consumers, Nigerian Electricity Regulatory Commission (NERC) and Aba Power Limited Electricity (APLE) were at loggerheads yesterday over challenges facing consumers as the distribution company seeks to increase electricity end-user tariff to an average of N240 per kilowatt hour.

Speaking at a public hearing organised by NERC, the DisCo said its revenue requirement of N227 billion for the tariff year is necessary to cover escalating costs, including purchasing gas at a higher-than-regulated price and addressing operational inefficiencies.

The DisCo’s for 2025 is to push the tariff of Non-maximum demand (Non-MD) customers from the current N99.90 to N263.00 per kWh, while band A maximum demand (MD) customers would pay N283.09 and N289.11, respectively depending on the class of the maximum demand.

For its band B, the Non-MD rate would climb to N274.89, and MD customers to N280.29 and N289.55 for MD1 and MD2, respectively.

For band C customers, APLE asked NERC to approve a proposed tariff for Non-MD customers N216.47, and MD1 and MD2 are N244.15 and N246.31. Similarly, band D MD1 customers would see their rates rise to N192.74, while band E Non-MD and MD1 customers would move to a proposed rate of N192.74, with MD2 customers also increasing to N193.03.

But NERC and consumers at the forum questioned the absence of a clear value proposition for customers, insisting that while the DisCo justifies the increase with rising costs, tangible improvements for customers are elusive.

Managing Director of APLE, Ugo Opiegbe said the operational cost of the company has soared, adding that the previous review pegged its tariff charge at N99.90KWh, which is no longer sustainable.
He noted that the cost of energy purchase from the upstream end of the market has also increased, adding that the macroeconomic developments in the country have made it difficult for APLE to continue to operate profitably.

The organisation, Opiegbe said incurred over N26 billion in debt to the Niger Delta Power Holding Company due to the tariff structure, stressing that the monthly invoice stands at about N1.5 billion.

He said the increase would enable the company to reduce Aggregate Technical, Commercial, and Collection (ATC&C) losses from 64 per cent to 26 per cent.

However, stakeholders at the forum questioned the plan to deploy 100,000 meters in 2025 as they criticised the steep increase in metering capital expenditure from N4 billion to N19 billion without clarity on past spending or timelines for delivery.

Speaking at the forum, the Vice Chairman of NERC, MusiliuOseni disclosed that proposals of the Organisation would be critically examined.

Rising concerns over consumer exploitation, he said: “Before we allow your cost to be passed on to the end user, we’ll have to look at it and see whatever problems it might cause.”