Electricity tariff hike: FCCPC, others pressure FG to revert decision
• As Falana demands panel to investigate electricity subsidy
• ‘Concerns over rowdy sessions may have stalled lawmakers’ resumption’
Amid growing opposition to the recent hike in electricity tariff, the Federal Competition and Consumer Protection Commission (FCCPC) has asked the Nigerian Electricity Regulatory Commission (NERC) to mandate distribution companies (DisCos) to meter all unmetered Band A customers within 60 days, enforce the cap on estimated bills, and ensure compliance with required daily supply for respective tariff Bands (A to E).
The commission made this known in a statement signed by Acting Executive Vice Chairman/Chief Executive Officer, Adamu Abdullahi, who noted that metering unmetered Band A customers would ensure accurate billing and protection of consumers from arbitrary charges.
FCCPC urged more robust and vigilant enforcement as well as greater transparency in billing and power supply, as a balance to the recently increased tariff for Band A customers.
It said: “While NERC approved the tariff realignment and Service Delivery Commitments for Band A electricity customers to ensure the sustainability and viability of DisCos and the entire electricity sector, we acknowledge the legitimate concerns raised by consumers. Many consumers have expressed fear that the likelihood of arbitrary estimated billing for unmetered Band A customers could lead to consumer abuse and dissatisfaction.
“DisCos’ repeated failure to meet the minimum power supply hours for respective tariff bands and their failure over time to compensate consumers for service downtime have made consumer grievances worse. To address these concerns and promote consumer welfare under the current service reflective tariff regime, FCCPC encourages NERC to mandate DisCos to meter all unmetered Band A customers within 60 days.”
The commission stressed that unless a consumer on Band B, C, D, or E is metered, the DisCos should not be allowed to migrate such a consumer to a higher tariff band to avoid any form of exploitation.
Also, FCCPC commended the recent enforcement action taken by the regulator against the Abuja Electricity Distribution Company (AEDC) for violating the Supplementary Order to the Multi-Year Tariff Order (MYTO) 2024, which mandated the DisCo to reimburse all customers in Bands B, C, D, and E who were billed above the allowed tariff bands and pay a fine of N200 million.
It said NERC’s decision to penalise AEDC reinforces FCCPC’s strong advocacy for protecting consumers from unfair market practices, as mandated by the Federal Competition and Consumer Protection Act 2018. The action was taken within 48 hours of the introduction of a new tariff regime for Band A customers.
It added: “The FCCPC is pleased with NERC’s recent order to DisCos to automatically downgrade any Band A feeder that does not enjoy the minimum requirement of 20 hours per day power supply for seven consecutive days. While the commission will closely monitor the implementation of this directive by all parties, in line with extant laws and an existing Memorandum of Understanding (MoU) with NERC, we urge NERC to diligently enforce the proposed measures and collaborate with stakeholders to address consumer concerns, to foster a sustainable and consumer-friendly electricity market.
“The commission is confident that NERC will persist in imposing appropriate penalties on DisCos for violations, which will promote compliance and accountability in the electricity industry.”
THIS came as human rights lawyer, Femi Falana, called on the Federal Government to institute a panel of inquiry to investigate the claim by the Minister of Power, Adebayo Adelabu, that electricity subsidy for 2024 is N3 trillion.
He said the panel should also investigate the alleged diversion of N32 billion paid into the account of a private company account in 2003 for the supply of three million prepaid meters in the country.
Falana, who is also the chairman of Alliance on Surviving COVID-19 and Beyond (ASCAB), said the inquiry is necessary because NERC has concluded a plan to further hike electricity tariffs under the pretext of removing subsidies from the sector.
He said the Muhammadu Buhari administration stopped the electricity subsidy in 2022. He said the Federal Government had, on March 23, 2021, announced a plan to end electricity subsidies by the end of that year.
Falana argued that the only reason the cost of power is high in Nigeria is because the country does not generate enough. According to him, “If we generate 10GW of power, the tariff will be half of what it costs. So, keeping the prices very low is not the approach, but delivering adequate power.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, had said that the Federal Government had quietly removed electricity subsidy.” He said while Ahmed was speaking at a virtual meeting of African Finance Ministers and the International Monetary Fund, she said the amendment of the budget was ongoing to accommodate incremental removal of fuel subsidy.
He referred to Ahmed’s statement: “We had a setback; we were to remove fuel subsidy by July this year, but there was a lot of pushback from the polity. We have elections coming, and because of the hardship that citizens went through during the COVID-19 pandemic, we felt that the time was not right. So, we pulled back on that. But we have been able to quietly implement subsidy removal in the electricity sector.”
MEANWHILE, two groups, the Igbo Journalists Association (IJA), and the Foundation for Environmental Rights, Advocacy and Development (FENRAD), urged President Bola Tinubu to order NERC to rescind the tariff hike.
Statements issued at the weekend by IJA National Coordinator, Amby Uneze, the interim Secretary General, Godswill Megwa; and Executive Director of FENRAD, Nelson Nnanna Nwafor, said the hike was ill-timed, outrageous, and capable of inflicting further hardship on citizens. IJA said it viewed the hike as an affront designed to further impoverish people of the country.
“From all indications, Nigerians are still grappling with the hardship which the removal of fuel subsidy by the Tinubu administration caused. Therefore, another policy to continue to stifle the people would amount to sending them to an early grave.”
“Business owners and analysts are of the view that the move will further cut the slim survival rate of an average business and the disposable income of many homes struggling to survive the current economic situation.
“We join Nigeria’s opposition leader, Atiku Abubakar, in his observation that the hike in electricity tariff ‘will create more difficulties for the citizens as inflationary pressures are elevated’.
“We also enjoin the Federal Government to listen to Nigerians when they voice out their grievances over certain unpopular policies, especially the electricity hike and fuel subsidy removal.”
On its part, FENRAD said: “It is not ideal to remove energy subsidy in the current circumstance because, following fuel subsidy removal, which took a huge toll on the national economy, accompanied by foreign exchange market windows unification, many businesses barely recovered. The exercise, no matter the amount it allows the Federal Government to save up, is not timeous or pro-people because there is no recovery yet from a previous similar exercise.
“More so, from Band A consumers we may eventually get to Band E, the least tariff class in the energy sector banding, because one particular tariff class alone cannot sustain the full weight of subsidy removal on national consumption. Again, this may negatively impact productivity, as prices of goods are likely to increase, thereby increasing existing inflationary pressure.”
The group added: “It is largely unsustainable. It is equally unsupportable for electricity consumers in a country where total national grid collapse is still the order of the day to pay about 240 per cent of what they currently pay because the Federal Government is implementing an IMF report.
“Ordinarily, one would have thought that the World Bank’s structural adjustment of the mid-’80s was enough as a lesson. We are aware that across bands, it is hard to say which Nigerian tariff class enjoys a 20-hour energy supply, even among the so-called Band A consumers.
“Removal of subsidy may augur well as a plan, perhaps in the long run. But combating hunger and preventing possible hardships in the intervening period is the real challenge, because the removal of subsidy on energy, if it happens across bands, may occasion a need for palliative, especially among small-scale businesses, with middle- and low-income families likely to plunge deeper into poverty.
“How many more Nigerians need to die before the rays of the Renewed Hope are seen? Government and investors must harmonise the energy sector by ensuring mass metering, addressing the problem of infrastructure decay, and deploying modern technology, before any talk of subsidy removal.
“Removing subsidy without first critically reforming the sector is like building something on nothing. These are not the times.”
ALSO, findings have revealed that to avert rowdy sessions that may break out during the debate on the recent hike in electricity tariff, the National Assembly had approved a week’s extension of the Easter/Sallah holiday.
The two chambers had announced that plenaries and other legislative duties, which were originally meant to resume next Tuesday, April 16, 2024, were now shifted to Tuesday, April 23.
It was learnt that acting on security intelligence and the initial reaction of many lawmakers against the hike, principal officers led by Senate President, Godswill Akpabio, and Speaker of the House of Representatives, Tajudeen Abbas, resorted to extending the recess, to provide sufficient time for consultation among various caucuses.
Before the new resumption date, the leadership of the National Assembly, it was learned, would work on groups from where trouble is feared to emerge in the two chambers including the minority parties caucuses; the northern Senators as well as the northern Representatives’ caucuses.
A ranking senator from one of the northeastern states told The Guardian that the extension was a good idea, saying: “How would you expect that amid the anger and frustration being expressed in several quarters against the hike in electricity tariff, in addition to the astronomical rise in cost of living, lawmakers would enter the chambers and keep quiet? We represent Nigerians from 360 federal constituencies as well as 109 senatorial districts. None of us will, honestly and sincerely, say he is not under immense pressure from constituents at this moment.”
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