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That curious electricity tariff relief

By Editorial Board
23 October 2020   |   6:54 am
A move to give Nigerians electricity relief for three months is curiously meretricious. The other day, amid epileptic power supply...

A move to give Nigerians electricity relief for three months is curiously meretricious. The other day, amid epileptic power supply situation, the Nigerian Electricity Regulatory Commission (NERC) slammed Nigerians with a sharp increase in electricity tariff, which has raised serious outcry and resentment.

The general expectation of the people at this time is that the tariff increase should be suspended while effort should be made to improve the power supply situation. This is the feeling of the public that the authorities seem to be ignoring.

It is therefore not clear what the three￾month tariff relief tokenism is meant to achieve at a time Nigerians are expecting a regular and affordable power supply regime. It is amazing that government appears to be playing with the sen￾sibilities of Nigerians. Truth is that the
tree-month tariff relief cannot make any
difference in the economic wellbeing of electricity consumers.

Reports say the Federal Government and organised Labour struck the deal as a follow up to the negotiation arising from the two-week suspension by Labour of the proposed nationwide strike on the recent electricity price increase.

The deal provides for a tariff relief of N10.20 per kilowatt-hour for Nigerians and that includes distributing six million free meters in the next three months.

Minister of State for Labour and Employment, Festus Keyamo, in a communiqué issued at the end of the meeting, said the participants agreed to resolve issues affecting the sector in the medium term, and provide immediate succour to customers. However, the immediate palliatives would not exceed December 31, 2020.

The document read in part: “Following extensive analysis, it was realised that VAT proceeds from the Nigeria Electricity Supply Industry (NESI) could be used to secure varying levels of relief in customer tariffs across bands A, B and C, ensuring that all customers receive some forms of relief during this difficult time.

Cumulatively, the per kWh relief that will be provided to customers in bands A, B and C is N10.20 per kilowatt-hour (kWh), which will be distributed across the bands. The relief will be in place for the two to the three months period required for the Technical Committee to conclude its extended scope of work. It should be noted that bands D and E tariffs were not
changed, and this freeze will remain in place.”

The relief deal also includes a fact that the National Mass Metering Programme (NMMP) would be accelerated. This programme will distribute six million meters to Nigerians free of charge.

Having secured Central Bank of Nigeria (CBN) funding for this programme, the meters will be immediately distributed to consumers using stockpiles in-country and local assemblers. The cost of meters shall be recovered from the DisCos.

Accordingly, the six million meters to be procured for the NMMP will only be through local manufacturers and assemblers. This will create jobs, and a new meter manufacturing sub-sector in the country.  It needs to be pointed out that the Multi Year Tariff Order (MYTO) upon which NERC based the latest hike has not
been implemented in the public interest.

MYTO presumed that electricity supply would steadily rise, which would necessitate periodic review of tariff. But rather than improve, the power supply situation has been on the decrease, yet the tariff is frequently reviewed based on MYTO.

For instance, NERC based the present hike in electricity tariff on MYTO 2015 and the Minimum Remittance Order (MRO) for 2020. While poor services persist, NERC has continued to raise tariff arbitrarily, not minding the negative impact on Nigerians. There is no competition among the various DisCos. There are alternative sources of energy that are not
being exploited to boost power supply.

Nigerians should not be exploited under any guise. What is currently being paid is not commensurate with supply, which is low. The mass metering being presented now as a relief ought to be taken for granted.

Origin of the present darkness: It is unfortunate that the power sector was sold to unreliable parties and free loaders. Since the privatization of the sector, there has been no investment in any aspect of power supply infrastructure.

The terms of engagement are not clear to the people and indeed consumers. It is not clear who should do what amid curiosity that government has been pumping stimulus package to the industry already dominated by private investors.

Despite all the noise and lamentation, services are not being provided. Rather than provide the necessary capital for investment, government has been bailing out the electricity companies. And this has paled into insignificance.

Given the wobbly energy situation in Nigeria, this newspaper believes that what we need is energy democracy. This means devolution of power supply.

Companies, individuals and regions that can do it should be permitted to generate power for use and sale to interested consumers. The time to rethink the power generation transmission and distribution is now. It is government
that started this mess, so the same government should clear it.

It should be noted by the authorities that the damage being done to the country as a result of poor electricity supply is unquantifiable. The kneejerk measures being adopted cannot resolve it. The situation should not be allowed to continue. What we need is a permanent solution not this ad-hocism called three month’s relief from high tariff that the economy of consumers can’t cope with.

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