Following the commencement of negotiations between the Distribution Companies (Discos) and electricity consumers for a review of electricity tariffs, there is a major likelihood that a hike in tariffs will take effect next month.
The new tariffs will, however, be subject to the approval of the Nigerian Electricity Regulatory Commission (NERC).
NERC had in April 2015 authorised the Discos to fix tariffs based on operational costs in their locations, but directed that the tariffs would be subject to approval by the regulatory agency.
The agency also directed the Discos to interface with their customers to arrive at acceptable rates that would be presented for approval.
The new tariff regime to be set by the Discos, with the approval of NERC, will commence in July under a new Multi-Year Tariff Order (MYTO).
The Chairman of NERC, Dr. Sam Amadi, had stated that the regulatory agency had in the past encouraged the Discos to hold consultations with customers on the issue of tariffs, adding that it would henceforth be the duty of the downstream electricity companies to fix the tariffs and not his agency.
According to him, NERC would only approve what would be presented to it as new tariffs by the Discos after the companies had consulted widely with their customers.
In one of the customer consultation meetings held in Lagos at the weekend, the Managing Director of Eko Electricity Distribution Plc (EKEDP), Mr. Oladele Amoda, told the company’s customers that it would be better for them to pay a slight increase in tariffs and enjoy improved electricity supply instead of paying between N100 and N60 per kilowatt hour to generate their own power on diesel and petrol.
He said under the current tariff structure, the highest tariff in the company’s network was about N29 per kilowatt hour, while individuals and businesses that used petrol and diesel paid as much as N100 per kilowatt hour to generate their own power.
“In conclusion, it is believed that nothing good comes easy and Eko Electricity Distribution Plc has invested so much to sustain and enhance operations towards improving services to the customers.
“It is on the need to sustain continuous investment that we have called for this meeting in order to consult with our esteemed customers on our proposed adjustment in tariffs to partly meet the reality of the prevailing economic situation,” Amoda said.
However, Amoda did not disclose the new tariffs to be presented to NERC for approval, but assured the customers that the new rates would be reasonable and affordable.
Amoda said the company was exploring alternative sources of power supply since its power allocation from the national grid was grossly inadequate.
“We have commenced a process to augment power allocation from the grid with about 700MW through embedded Independent Power Plants (IPPs) and more from bilateral agreements with existing merchant generators,” he added.
He also unveiled the measures put in place by his company to eliminate estimated billing and urged customers to embrace any of the options presented by the company to avoid billing by estimation.
Shortly after NERC’s directives that the distribution companies should fix their own tariffs, a Federal High Court in Lagos, last month, had restrained NERC from implementing a new tariff regime.
The presiding judge, Justice Mohammed Idris, who gave the order based on an ex-parte application filed by a Lagos-based lawyer, Mr. Toluwani Adebiyi, also restrained NERC and the Discos from implementing any tariff increase to avoid further hardship on Nigerians.
In the suit, Adebiyi is seeking an order restraining NERC from increasing tariffs without any significant improvement in electricity supply for at least 18 hours a day in most communities across the country.