The Nigerian Electricity Regulatory Commission (NERC) has directed all electricity distribution companies (DisCos) in the country to suspend the proposed tariff increase which was to commence on April 1, 2020.
The announcement made via NERC’s official Twitter handle outlined various reasons why the electricity tariff increment had been postponed for the second time. The electricity regulator, therefore, issued an order which is prior to review that the new date for the implementation of tariff measures is June 30, 2020.
In a statement released by Nigeria’s Minister of Power, Sale Mamman on Tuesday, March 31, 2020, it revealed that as part of the federal government’s effort to ameliorate the current challenges caused by the COVID -19, NERC was ordered to delay its proposed tariff increase. Mamman stated that “tariffs will only be raised when DISCOs improve the quality of supply, meter consumers and agree with consumers on rates.”
These resolutions were based on the outcome of public hearings on tariffs in which several Nigerians condemned the increase citing it would mean “paying more for darkness” as the electricity situation in the country has not been improved. Nigeria Labour Congress (NLC) described the hike as a daylight robbery, considering the epileptic power supply in the country. “We have yet to get value for the money Nigerians to pay on the electricity bill, why increase the tariffs when the supply is not stable and consistent,” NLC said.
Although the DISCOs have argued that the current tariff plan is not viable to sustain their operations, Mamman warned that DISCOs who fail to improve will be sanctioned. NERC also mandated all distribution companies to continue billing customers the current electricity tariff which has been in force since 2016. This is a temporary setback for DisCos, Gencos, and other power sector stakeholders who have for years called for a cost-reflective tariff for the sector.
Mamman explained that the Ministry is supportive of a “service reflective” tariff system which is more equitable and will encourage investment in the sector. Subsequently, the Ministry will work together with NERC to ensure that improvements happen in the entire DISCO network. Thus, an estimated billing which is capped per NERC Order 197/2020 will eliminate the arbitrary billing issue that Nigerians have raised.
In addition, the Ministry of Power revealed that it also working on other key emergency measures to support the NESI (Nigerian Electricity Supply Industry). “We are working with the CBN to ensure payments to the generators and gas suppliers through the Payment Assurance Facility (PAF) which is expedited to support power supply,” the statement said.
Mamman disclosed that in order to provide support to all Nigerians during this period of COVID-19 pandemic, the Ministry will continue to implement key infrastructure programs such as the Siemens/Presidential Power Initiative (PPI). Similarly, the Ministry will accelerate programs with the Rural Electrification Agency (REA) to support citizens without access to a power supply through Solar Home Systems and Solar Mini-Grids.
