The Nigerian Electricity Regulatory Commission is going ahead with plans to review power tariffs in July this year despite widespread resentments by the organised labour, consumer groups and other individuals.
NERC had announced on April 26, 2021 that another tariff review for Nigeria’s 11 power distribution companies would hold in July, explaining that inflation, gas price, among others, had changed.
It disclosed this in its notice of Minor and Extraordinary Review of Tariffs for Electricity Transmission and Distribution Companies, a development that might lead to a rise in the tariffs payable by electricity users.
But on April 30, the Minister of Power, Sale Mamman, dismissed concerns of a major hike in electricity tariffs, as he clarified that there was no plan to significantly raise tariffs.
Mamman said instead of a significant hike in electricity tariffs, Nigerians should expect increased efficiency in the sector to reduce tariffs, while managing headwinds from foreign exchange and inflation.
However, after the tariff hike dismissal statement of the minister, the NERC on Sunday granted approval for the Extraordinary Tariff Review applications, Performance Improvement Plan and Capital Expenditure for electricity distribution companies.
It was gathered that the Discos had applied for cost reflective tariffs, which would warrant a hike in the rates payable for electricity if implemented.
The NERC announced the approval of Discos’ tariff review applications in the commission’s Order on Performance Improvement Plan and Extraordinary Tariff Review applications for power distributors operating in Nigeria.
It said the PIP and Capital Expenditure programme would take effect from July 1 and remain effective until June 30, 2026.
Power consumer groups and the Nigeria Labour Congress resisted the moves by the Federal Government and its electricity sector regulator on Monday, but the NERC insisted that the review would definitely hold.
The commission, however, noted that it was the prerogative of the Federal Government to implement the outcome of the review, stressing that tariffs must be adjusted based on the prevalent economic realities.
In an emailed response to enquiries by our correspondent, the Head, Public Affairs, NERC, Michael Faloseyi, said, “The review is part of what the commission does at specified intervals.