NERC raises electricity tariffs by over 45%

Babatunde-Fashola

The Nigerian Electricity Regulatory Commission on Monday announced new tariffs payable by electricity consumers, indicating increase in charges for different categories of consumers across the country.

The commission, however, abolished the fixed charges and declared that electricity users would only pay for what they consumed.

About two weeks ago, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, had hinted that the electricity tariffs would go up, insisting that the sector would record considerable improvement thereafter.

NERC said the new electricity rates and its directive on fixed charges would take effect from the next billing period.

Based on the new tariff regime so far released by NERC, residential consumers (R2) will pay on the average 48 per cent more than what they are currently paying as contained in the Multi Year Tariff Order 2.1 for 2015.

Indeed, consumers under the Abuja Electricity Distribution Company, who are paying N19.96 as energy charge currently, will now pay N29.56, representing an increase of 48.1 per cent; those under the Eko Disco will now pay N28.75 instead of N18.75, representing 53.3 per cent increase.

Those under Ikeja, Kaduna and Benin Discos, who used to pay N14.96, N20.66 and N18.46 for a unit of electricity, will now pay N22.96, N31.71, and N27.72, respectively. These represent 53.5 per cent, 53.5 per cent and 49.62 per cent rise for the three Discos, respectively.

According to the document released by NERC, commercial consumers (C2) under the Ibadan and Enugu Discos, who used to pay N26.79 and N29.05 for a unit of energy, will now pay N38.87 and N42.4. These represent 45.1 per cent and 45.9 per cent increase in the respective rates.

NERC said, “Residential customer classification (R2) in the Abuja Electricity Distribution Company will no longer pay N702 as fixed charge every month. Their energy charge will increase by N9.60. Also, residential customers (R2) in Eko and Ikeja electricity distribution areas will no longer pay N750 fixed charge. They will be getting N10 and N8 increase respectively in their energy charges.

“Similarly, the burden of N800 and N750 fixed charges will be lifted off the shoulders of Kaduna and Benin electricity consumers. These consumers will see an increase of N11.05 and N9.26, respectively in their energy charges.

“Commercial customers’ classification (C2) in Ibadan and Enugu will no longer pay fixed charges of N17,010 and N22,141. Their energy charges will increase by N12.08 and N13.35, respectively.”

For other consumer classes, the commission stated that the full details of the new tariff regime would be advertised in major national dailies and on its website.

Speaking on the development, the Chairman/Chief Executive Officer, NERC, Dr. Sam Amadi, said, “This is good news for electricity consumers who have long asked for a more just and fair pricing of electricity. The regulatory commission had promised to address all the complaints against fixed charges through a regulatory process that promotes investments in the electricity industry without unfairly burdening electricity consumers.

“This is in line with NERC’s mandate to be fair in all its regulatory interventions. The objective of the new tariffs is to enable prudent consumers to save money on electricity bills as they can now control their consumption and not pay monthly fixed charges.”

He said the new tariff regime came with renewed commitments by the electricity distribution companies to rapidly improve the quantity and quality of electricity supply.

According to Amadi, the commitments are contained in service level agreements submitted by the power firms during the bid process.

He said the tariff order would also encourage the Discos to develop new sources of supply within their franchises to increase the quantity and quality of supply to target customers on a willing buyer and willing seller basis.

NERC further stated that henceforth, every Disco should meter all its customers, adding that the metering policy would be strictly enforced.

It said, “For those willing electricity customers who paid for meters under the Cash Advance Payment Metering Initiative but have yet to be metered within the allowable 60 days, they will no longer be billed by the Discos under the new tariff regime. The Discos will not disconnect them. There is zero tolerance for over-billing of customers.

“An unmetered customer who is disputing his estimated bill will not be expected to pay the disputed bill. He will pay his last undisputed bill as the contested bill goes through the dispute resolution process. This is a departure from the old practice, which prescribes that customers should first settle the bill, while dispute resolution is in process.”

NERC also declared that no Disco would be allowed to connect new customers without metering them first.

This, it said, was to close the wide metering gap of over 50 per cent and reduce the high incidence of collection losses in the Nigeria electricity supply industry.

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