Presidency withholds increase in electricity tariff

Indications emerged yesterday that the Presidency and the Ministry of Power, Works and Housing are withholding the introduction of cost reflective tariffs in electricity supply industry after the Nigeria Electricity Regulatory Commission (NERC) has forwarded to it the reviewed Multi Year Tariff Order (MYTO) for implementation.

The MYTO is a methodology through which the NERC, which is the Federal Government agency charged with power sector regulations, determines the electricity tariff and effects reviews periodically.

The reviewed MYTO has not been approved and introduced for compliance since 2015. But NERC Principal Manager, Aisha Mahmoud, said NERC had made the review which would see electricity consumers paying as much as N51 per KW/hr.

The implication is that if eventually approved, electricity consumers will be paying more than the present tariff of N4 per KW/hr. Aisha Mahmoud spoke while making presentations on “Fundamentals of the MYTO methodology” at a workshop on “Media reporting in the Nigeria power sector” organised by the Association of Power Generation Companies (APGC).

She said that NERC had also proposed to the government the timing of the review of electricity tariff whether it would be monthly, quarterly, semi-annual or annually for minor reviews.

However, major review is done after a period of 15 years. She noted that the backlog of outstanding reviews since last year is four. But the electricity Distribution Companies (DisCos) have been agitating for introduction of cost reflective tariff which they hoped would enable them generate revenue and fund their distribution infrastructure and render efficient services to consumers.

In his presentation, the Managing Director of Emtech Energy Services, Uzoma Achinanya, in a paper “Understanding the power sector value chain and the Nigerian Electricity Supply Industry” advised that the federal government should intensify efforts towards proper energy mix and proper utilisation for economic and industrial development.

He noted that more than 75 per cent of electricity generated are used for domestic purposes while about 20 percent goes into industrial uses unlike advanced economies of the world where close to 80 percent goes for industrial purposes for further development of the country.

He also maintained that privatisation of the power sector is not an end of reform but that federal government should take further actions that would make the objectives of the privatisation to be realised for the benefits of the country.

However, the Executive Secretary of APGC, Dr. Joy Ogaji appealed to the federal government to compel Nigeria Electricity Bulk Trader to make effective use of the N701 billion granted to it to make whole, timeous, full payment of debts owed to power Generation Companies (GenCos).