Adedapo Adesanya
By Adedapo Adesanya
The Nigerian Electricity Regulatory Commission (NERC) defended its decision to increase the electricity tariff of Band A customers on Wednesday.
In reaction to the outrage generated by the action, the agency’s vice president, Mr Musiliu Oseni, at a media briefing, disclosed that the affected electricity consumers will now pay N225 for a kilowatt per hour as against the previous rate of N68 per kilowatt per hour.
Speaking on Channels Television’s Politics Today on Wednesday, Mr Oseni said that the commission is empowered by its Act to ensure that the licenses operating efficiently are allowed to recover sufficient revenue for the capital invested, for the operational cost as well as having a return for the investment they have made.
“What informed the decision apart from the position of the Act is in the sense that if you look at December 2023, there was an improvement to the quality of service to January but from January up to date, there was a dip in generation availability.
“What caused that was because there was no review of tariff. The DisCos cannot be mandated to pay for what they have not been allowed to charge and in that case, the payment to generation companies has significantly dipped which affects their ability to maintain their machine and also to pay for gas.
“And if they are not able to pay for gas definitely, they won’t be able to generate, not minding the fact that they also need money to maintain their machines.
“So, we are at a point where it is clearly that if nothing is done to ensure that tariff is reviewed so that the market can be relatively liquid the quality of supply won’t improve.”
Mr Oseni also explained that the tariff review affects only band A customers because they receive about 20 hours of electricity daily.
He, however, said that before the tariff increase, the Band A category was reviewed down from over 1,000 feeders to 481 feeders out of 3,000, representing 17 per cent of the over 12 million electricity customers captured in the Nigerian Electricity Supply Industry (NESI).
Mr Oseni also revealed that NERC had also ordered that the majority of the feeders which did not previously meet the 20-hour supply threshold be downgraded to lower bands.
“We currently have 800 feeders categorised as Band A, but it will now be reduced to under 500. This means that 17 per cent now qualify as Band-A feeders. These feeders only service 15 per cent of total electricity customers connected to the feeders.
“The commission has issued an order which is titled April supplementary order and the commission allows a 235 kilowatt per hour,” Oseni said in a press briefing announcing the new tariff earlier in the day.”
There are several bands for customers ranging from Band A who enjoy 20 hours of electricity down to Band E consumers which have approximately four hours of power supply on average.
