Government suspends increase in electricity tariff till July

Planned review insensitive, says Labour, threatens strike

The Nigerian Electricity Regulatory Commission (NERC) yesterday suspended increase in electricity tariff from today till July this year.

In a release by its chairman, James Momoh, the regulator directed all distribution companies to submit a detailed plan for the attainment of full recovery of prudent costs and returns on capital revenue requirements by June 30.

The NERC had in a December 2019 minor review of the Multi-Year Tariff Order (MYTO) 2015 and Minimum Remittance Order for 2020 disclosed that it would increase tariff from today.

But the increase was described by most stakeholders as “one of the most callous decisions in the face of epileptic power supply as well as lockdown of economic activities and the many implications of the Coronavirus outbreak.”

The revenue recovery and financial sustainability plans are to be submitted to the commission not later than April 21 and would include a path, with timelines, for transiting customers to higher quality of service.

The NERC also directed the DisCos to submit revised performance improvement plans based on efficiency within the period.
According to the commission, the approved plans would form the basis for future tariff reviews and recovery.

It noted: “All future tariff reviews shall be on the basis of consultations between the DisCos and customer clusters with firm commitments on rates and quality of service. The service level compact shall include a compensation mechanism for end-users to address the DisCos’ failure to deliver on performance targets.

“All DisCos shall be required to disaggregate their respective service areas and/or customers in accordance with quality of service and supported by proposal for service reflective of tariff classes that shall be graduated by quality of service.”

The regulatory agency further ordered the utilities to, no later than June 30, provide 11kKVA smart meters and 33KVA feeders with the capability of sending real time or near real time data to the commission.

“The Federal Government of Nigeria shall provide full support during the transitional period to full revenue recovery ending on June 30, 2021 based on the under-recovery of the revenue requirement determined,” the directive stated.

However, the Nigeria Labour Congress (NLC) and the United Labour Congress (ULC) have condemned the planned increase, stating that it would only convey a “deafening expression of insensitivity to the plight of the Nigerian people, who are currently dealing with the social scare, income haemorrhage, economic squeeze and mortal dread of COVID-19.”

The labour centres, which planned to take action to protect Nigerians from the hike after the lockdown, argued that any increment would inflict further pains on Nigerians at this very trying period.

NLC president, Ayuba Wabba, who urged NERC not to embark on any “fruitless adventure that would cast aspersion on the good intentions of President Muhammadu Buhari”, stressed that Nigerian workers had already found tremendous succour in the pledge shared by the president in his address on March 29 this year regarding government’s plans to support the citizens in these tough times.