Consumers, NERC kick as DisCo pushes for N240/kWh tariff

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 (DisCo) 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 plan for 2025 is to push tariff of Non maximum demand (Non-MD) customers from N99.90 to N263 per kWh, while Band A Maximum Demand (MD) customers would pay N283.09 and N289.11, depending on the class of the MD.

For 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 N216.47 tariff for Non-MD customers, and MD1 and MD2 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, the tangible improvements for customers were 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 also increased, adding that the macroeconomic developments in the country made it difficult for APLE to continue to operate profitably.

The organisation, Opiegbe said, incurred over N26 billion debt to the Niger Delta Power Holding Company (NDPHC) due to the tariff structure, stressing that the monthly invoice stood at about N1.5 billion. He said the increase would enable the company reduce Aggregate Technical, Commercial and Collection (ATC&C) losses from 64 per cent to 26 per cent.

But 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.

Vice Chairman of NERC, Musiliu Oseni, disclosed that proposals of the organisation would be critically examined. Raising 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.”