• Most DisCos are technically insolvent, FG admits
• Adelabu: Only those not paying bills complain about new tariff
• New tariff suffocating us, small-scale industrialists cry out
• NLC, TUC threaten to shut down dams in Niger
 
The Senate, yesterday, temporarily stepped down the adoption of a report asking the National Electricity Regulatory Commission (NERC) to suspend the ongoing implementation of the multi-year tariff order (MYTO) 2024, which approved over 200 per cent upward review of the previous tariffs from N68/kWh to N225/kWh.

   
This is coming two weeks after the House of Representatives directed NERC to suspend the implementation of the new tariff on Band A customers. But the abrupt abortion of debate on the report of the Senate seeking the suspension produced another round of uproar in the Senate chamber on Thursday. The decision by the Senate was to allow for robust consultation with customers on the various bands on the cost of service.
   
The suspension came minutes after the submission of an investigative report of the Committee on Power on the planned hike in electricity tariff and the need to halt the proposed increase by Distribution Companies (DisCos) amid the economic situation in Nigeria by Senator Enyinnaya Abaribe.
   
In the 46-page report, the committee recommended that NERC should ensure full compliance with the mandatory requirement of stakeholder consultation under Section 48 of the Electricity Act, 2023 regarding future regulatory decisions, to avoid a repeat of the confusion and public outcry that trailed the recent tariff increase.
   
The report also recommends that NERC adopt measures to address the problem of power scarcity holistically, rather than its preoccupation with price manipulation, which has proven counterproductive.

In the robust debate, most lawmakers expressed the urgent need to adopt the recommendations.Chief Whip of the Senate, Ali Ndume, said the plan by NERC was discriminatory and unconstitutional. Senate Minority Leader, Abba Moro, said it is sad that Nigerians provide transformers for their communities and pay the electricity companies to install them, after which DisCos take ownership of the transformers.
   
However, the Chairman Senate Committee on Rules and Business, Senator Titus Zam, as well as Senator Jimoh Ibrahim, raised objections over the adoption. They asserted that the matter be stepped down, citing a pending court case, necessitating the suspension of further debate on the report temporarily.
   
Ruling on the matter, the Deputy President of the Senate, Barau Jibrin, who presided over the plenary, said he knew about the court order, adding that he was therefore constrained.
   
A Federal High Court had on May 3, issued an order restraining NERC and the Kano Electricity Distribution Company (KEDCo) from implementing the new electricity tariff for Band A consumers.

THE Federal Government yesterday admitted that most of the DisCos are technically insolvent and are unable to pay for invoices sent to them from the electricity market and invest in network expansion projects.

   
Speaking at the 8th Africa Energy Marketplace 2024 in Abuja, NERC Chairman, Sanusi Garba, said the poor financial state of the DisCos makes it difficult for them to raise the needed capital to invest.
   
On his part, the Minister of Power, Adebayo Adelabu, said the government was working to get the DisCos solvent and effective by unbundling their operations along state boundaries. He insisted that the areas covered by the current DisCos were too large for them to deliver effective services to consumers.
   
Speaking on how the government will tackle the N1.3 trillion owed to power generation companies (GenCos) and the $1.3 billion debt to gas companies, the Minister disclosed that President Bola Tinubu has approved a plan to liquidate the debts.
   
According to him, “Mr President has approved the submission made by the Minister of State Petroleum (Gas) to defray the outstanding debts owed to the gas supply companies to power GenCos. The payments are in two parts, the legacy debts, and the current debts. For the current debt, approval has been given to pay about N130 billion from the gas stabilisation fund, which the Federal Ministry of Finance will pay.
   
On its part, the African Development Bank, AfDB, said it has so far spent over $450 million to support various power sector projects and programmes with another $1 billion planned to support the power sector reform effort by the government.
   
The Minister again stirred the hornet’s nest when he said the hues and cries on the electricity tariff hike for Band A customers are from those who were not paying electricity bills in the past, stating that the new tariff has led to a reduction in energy cost for consumers in the band by 30 to 40 per cent.
 He faulted the claim that the new tariff has increased the cost of production for manufacturers, leading to the high cost of goods and services.
   
“The electricity tariff was not targeted at improvising Nigerians or worsening the already bad economic situation of high inflation rate and naira losing value but targeted at resolving or reducing the hardship of the people.
   
“Those on Band A, if they should do their arithmetic properly, to compare what they have been spending on energy provision from grid supply and energy generators put together, before the review of tariff, they have achieved nothing less than 30 to 40 per cent reduction in their total cost. That is the truth.
   
“Manufacturers under Band A should have a lower energy cost by now, thereby, reducing their cost of production. Except those that have not been paying for electricity in the past. We can also come together to compare notes with practical examples. But how this new tariff regime will increase the cost of production is not valid because I am in that industry too.”
   
Despite the Minister’s explanations, the National Association of Small-Scale Industrialists (NASSI) has said the sudden increase in electricity prices has placed an unbearable burden on small-scale industrialists, who are already grappling with numerous challenges such as high production costs, limited access to credit facilities and stiff competition both locally and internationally.
 
 Chairman of the association, Aminu Ibrahim Kurawa, said the impact of the new electricity tariff poses a significant threat to the survival and growth of small-scale industries across the country.
   
His words, “Many of our members operate on thin profit margins, and any additional increase in operating costs, such as electricity tariffs, directly impacts their ability to remain competitive in the market with our international counterparts who are already in our local market.”
   
Aminu explained that the new tariff plan will, in essence, kill the small-scale industrial sector and wreak havoc in society, including insecurity, which is already a huge challenge across the country.
   
“We urge all stakeholders, including government agencies, regulatory bodies, and policymakers, to prioritise the interests of small-scale industrialists in Nigeria. Our sector plays a crucial role in driving economic growth, creating employment opportunities and fostering innovation.”
   
Meanwhile, the organised labour in Niger State has threatened to shut down the hydropower dams in the state following the high electricity tariff. They issued the threat during a protest to the Abuja Electricity Distribution Company (AEDC) office following directives by the national body of Nigeria Labour Congress (NLC).
   
Addressing the protesters, the Chairman of NLC in the state, Idrees Lafene, said the state reserves the right to enjoy 24-hour power supply at a lower cost.
 
 “This dam belongs to the people, that is why NLC and TUC have agreed that this would be the first warning step for the authorities to do the needful, otherwise, we will go to the dam and shut it down.”