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Nigerians to pay more for electricity from April


• As NERC Plans Implementation Of Cost Reflective Tariff

Electricity consumers in Nigeria will pay more tariff from April this year, a Minor Review of the Multi Year Tariff Order (MYTO) 2015 and the Minimum Remittance Order (MRO) for 2020 published by Nigerian Electricity Regulatory Commission (NERC) has shown.

NERC has the mandate to implement the Electric Power Sector Reform (EPSR) Act 2005, especially Section 32, which allows it to ensure prices charged by licencees (distribution companies) are fair to customers and sufficient to allow licensees finance their activities and make reasonable profit for efficient operations.

In August last year, NERC published a minor review of tariff order, indicating that from 2020, consumers would pay a maximum N14 addition for every kilowatt-hour of energy, depending on their status and their distribution companies.

While the increase was expected to start from this month, the new order has suspended the directive till April, stating that “the Federal Government’s updated Power Sector Recovery Programme (PSPRP) does not envisage an immediate increase in end-users tariffs, until April 1, 2020 and a transition to full cost reflectivity by end of 2021.”

The Order, dated December 31, 2019 and signed by NERC Chairman, Prof. James Momoh and a Commissioner, Legal, Licencing and Compliance, Dafe Akpeneye, noted that the Federal Government would, in the meantime, fund the revenue shortfall between the cost reflective tariff and the actual tariff NERC allow customers to pay.
Since the President Muhammadu Buhari administration assumes office, as much as N1.3tr has been paid in bridging similar deficit, though the sector was originally designed to be self-sustainable.
According to the regulator, the review considered changes in macroeconomic indices, particularly inflation at 11.3 per cent, exchange rate at N309.9 to a dollar, and gas price at $3.30 per standard cubic feet (scuf).
In the event of a cost-reflecting tariff, a breakdown across the DisCos showed that consumers under Abuja DisCo, currently paying N32.7 would pay average of N54.3 per kilowatt per hour (KWH).
Under Benin DisCo, customers are expected to pay average of N32.5/kwh, instead of the new N56.4, while residential customers would pay N31.26/kwh.

Enugu DisCo would charge N35.3/kwh from customers, instead of N54.4/kwh, as residential customers pay N30.93/kwh.Eko DisCo would charge N28.3/kwh average, instead of N47.0/kwh cost-reflective amount, while residential customers would pay N24/kwh.
In Ikeja, consumers, who ought to pay N44.6/kwh would pay N27.3/kwh, while residential customers continue to pay N21.30/kwh. Kano DisCo would charge N52.7/kwh average, but consumers are allowed to pay N30.1/kwh, as the firm would charge residential customers N22.50/kwh. Yola DisCo would collect N57.4/kwh under cost reflective tariff, but would currently charge N26.8/kwh, as residential customers pay N23.25/kwh.


In this article:
James MomohNERC
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