NIGERIAN GOVERNMENT ORDERS 78% HIKE IN ELECTRICITY TARIFFS
The order has it that various tariff reviews are for all categories of consumers — except those consumers classified as residential (R1) who are categorised as those using singe phase and three-phase meters and electricity consumption of about 50 kWh in premises with flats exclusively for residential purposes.
Penpushing further reports that, the affected DISCos include Abuja Electricity Distribution Company, Benin Electricity Distribution Company, Enugu Electricity Distribution Company, Eko Electricity Distribution Company, Ibadan Electricity Distribution Company, Ikeja Electricity Distribution Company, Jos Electricity Distribution Company, Kaduna Electricity Distribution Company, Kano Electricity Distribution Company, Port Harcourt Electricity Distribution Company and Yola Electricity Distribution Company.
The Nigerian Electricity Regulatory Commission (NERC) said the new order updates was based on actual changes in macroeconomic variables in generation capacity as at October 31, 2019, including inflation rate of 11.3 percent for January to October 2019.
The Commission emphasized that the order, supersedes “other orders issued on the subject matter, and shall take effect from January 1, 2020.”, explaining that the review also affected the tariffs for other categories of consumers, namely commercial, industrial and special
Penpushing also reports that, Commercial consumers are those who use premises for any purpose other than exclusively as residence or as a factory for manufacturing goods, while the industrial consumers are customers who use their premises for manufacturing goods including welding and iron monger.
The special customers include those involved in agriculture (excluding agro-allied enterprises involved in processing), water boards, religious houses, government and teaching hospitals, government research institutes and educational establishments.
The order stated that, under the new tariff , commercial customers who have been paying between N20.45 and N27.20 per kWh since 2015 will now be paying between N37.39 and N47.09 per kWh, while industrial customers who have been paying between N20.95 and N27.22 per kWh in Abuja, will now be paying between N36.07 and N47.09 per kWh under the new dispensation, as well as those in the special category who have been paying about N20.06 per kWh in Abuja since 2015, will now be paying about N35.74 per kWh.
Penpushing reports that, Nigerian Electricity Regulatory Commission (NERC) said the order was pursuant to Section 32 and 76 of the Electric Power Sector Reform Act aimed at providing cost reflective tariffs that ensures prices charged by licensees are fair to consumers.
The commission said, such prices are supposed to be sufficient for licensees to operate efficiently to recover the full costs of their activities, including reasonable returns on the capital invested in the business.
The order, Section 17 of the MYTO 2015 said expects that changes in the variables in the economy outside the control of DISCOs, including inflation rates, foreign exchange rates, gas prices and available electricity generation capacity will be taken into consideration.
Penushing further reports that, the commission said, the order will also reflect the market shortfall for years 2019 and 2020 as well as determine the minimum remittances payable by the DISCOs in meeting their market obligations on the allowed tariff to allow the settlement of invoices by Nigerian Bulk Trading and the market operator.
The commission posited that, under the new tariff order, “All DISCos are obligated to settle their market invoices in full as adjusted and netted off by the applicable tariff shortfall. In the determination for compliance to the minimum remittance threshold in this Order, the Commission shall consider verified receivables from MDAs (ministries, departments and agencies) for the settlement period and DISCos’ historical collection efficiency for MDAs.
“The commission shall hold the TCN (Transmission Company of Nigeria) responsible for deviation from the economic dispatch order that adversely impact on the base weighed average cost of the wholesale of energy.
