NERC Suspends Electricity Tariff Hike

By Adedapo Adesanya

The Nigerian Electricity Regulatory Commission (NERC) has announced the postponement of the implementation of the new electricity tariff by the Electricity Distribution Companies (DisCos).

The increase in the amount paid for energy consumption in the country was initially scheduled to commence from Wednesday, April 1, but the regulator has now shifted its implementation by three months.

In a directive in line with Order /198/2020, the electricity regulatory agency noted that it took the decision to halt the commencement of the new tariff plan due to some reasons, chief among is the effect of the coronavirus on its ability to meter its unmetered customers.

According to NERC, COVID-19 is affecting the commission from meeting its target to meter all Nigerians by 2021 as critical equipment needed to assemble electrical meters cannot be imported into the country.

It said due to the negative effect of the pandemic on Nigerians and the industry, the right thing to do was to postpone the date of commencement of the new tariffs pending a minor review which will be issued on June 30, 2020.

This means all electricity tariffs increases have been suspended until June 30 when it will be revisited.

According to the commission, ‘There shall be no increase in tariff of end-use customers on April 1, 2020. Performance Improvement Plan will form the basis for future tariff review.”

NERC also mandated all distribution companies (DisCos) to continue billing customers with the current electricity tariff which has been in force since 2016 and ordered all DisCos to submit their Performance Improvement Plans (PIPs) and also file applications for an extraordinary tariff review with public hearings held from February 25 to March 9.

NERC then gave the DisCos 21 days from today, to submit new PIPs on how they can recover their costs prudently with marginal profit by June 30, 2021 especially on how customers will be guaranteed improved services.

The commission also directed the energy distribution firms to provide smart meters for their 11 kilovolts (kV) and 33kV feeders by 30 June 2020 so they can send real time data to the commission.

According to the order, the federal government will provide tariff support during the transitional period to full revenue recovery ending on June 30, 2021 based on the under-recovery (tariff subsidy).

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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