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Govt ignores House of Reps, raises electricity tariffs


NERC Chairman, Dr. Sam Amadi

NERC Chairman, Dr. Sam Amadi

• Fixed charges abolished
• Consumers to pay for only what they use
DESPITE last week’s call by the House of Representatives asking the Federal Government to stay action on any review, the Nigerian Electricity Regulatory Commission (NERC) yesterday unveiled a new tariff regime for consumers.

An analysis of the tariffs showed that consumers would witness different levels of increase across the country but would no longer pay the monthly ‘fixed charge.’

Vice President Yemi Osibanjo recently called attention to the need to adequately service the electricity supply value chain through cost-reflective tariffs.

The new tariffs, however, come with strict conditions for operators, as the nation’s 11 electricity distribution companies (Discos) have now committed to new service delivery conditions as part of a deal they entered with NERC.
By the new regime, residential customer classification (R2) in Abuja Electricity Distribution Company will no longer pay the N702.00 fixed charge every month, but their energy charge will increase by N9.60.

Residential customers (R2) in Eko and Ikeja electricity distribution areas will no longer pay the N750. 00 fixed charges but will witness a N10 and N8 increase respectively in their energy charges.
The burden of N800.00 and N750.00 fixed charges would be lifted off the shoulders of Kaduna and Benin electricity consumers who will, however, see an increase of N11.05 and N9.26 respectively in their charges.

For commercial consumers, NERC says it is ‘‘good news’’ as commercial customers (C2) in Ibadan and Enugu will no longer pay fixed charges of N17, 010. 00 and N22, 141. 00 but their energy charge will increase by N12.08 and N13.35 respectively.”

Similarly, the Discos would now be made to strictly implement their metering commitments and other related service delivery compacts with NERC.
For instance, no electricity distribution company is allowed to connect new customers without metering first.

This, according to NERC, is to close the wide metering gap of over 50 per cent and reduce high incidence of collection losses in the Nigeria Electricity Supply Industry (NESI).
According to NERC Chairman, Dr. Sam Amadi, every disco should henceforth meter all its customers.

The metering policy will be strictly enforced. Those electricity customers who paid for meters under the Cash Advance Payment Metering Initiative (CAPMI) but are yet to be metered within the allowable 60 days would no longer be billed by the electricity distribution companies under the new tariff regime. The discos will not disconnect them. There is zero tolerance for overbilling of customers.
‘‘An unmetered customer who is disputing his estimated bill would not be expected to pay the disputed bill. He would pay his last undisputed bill as the contested bill goes through the dispute resolution process. This is a departure from the old practice which prescribes that customers should first settle the bill while dispute resolution is in process,” Amadi said in Abuja yesterday.

He added: “Henceforth, from the next billing period, distribution companies will no longer charge their customers monthly fixed charges. Fixed charge is that component of the tariff that commits electricity consumers to paying an approved amount of money not minding whether electricity is consumed during the billing period.
‘‘Under the new tariff regime, electricity consumers will now only pay for what they consume from month to month. This is good news for electricity consumers who have long asked for a more just and fair pricing of electricity. The regulatory commission had promised to address all the complaints against fixed charges through a regulatory process that promotes investments in the electricity industry without unfairly burdening electricity consumers. This is in line with NERC’s mandate to be fair in all its regulatory interventions. Although, the new tariff regime comes with an increase in energy charges, consumers’ total bills will depend on the electricity they actually consume which may be reduced when they conserve electricity.”

Minister of Power, Works and Housing, Babatunde Fashola recently appealed to electricity consumers to brace for what he described as ‘fair market tariff,’ stressing that reliable electricity supply could only be guaranteed with increased pricing for consumption.

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