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Let Electricity Tariff Hike Be Based On DisCos’ Performance – Experts

As the Nigerian Electricity Regulatory Commission (NERC) is set to hold a stakeholder meeting on the upward review of electricity tariff, experts have urged the commission to make the review based on performance of the 11 Distribution Companies (DisCos) in improving their network areas.

With the review being the first that would be done under the Multi-Year Tariff Order (MYTO), which recognized a twice-yearly review of tariff based on improvements on the network of each DisCo, the experts who spoke with Daily Trust said a review without improvement in the electricity ecosystem would embolden the discos to exploit Nigerians.

Recall that the DisCos had last month advised Nigerians to buy bulk tariff due to the looming increase of the tariff they said was necessary as the prevailing situation is making them operate at a loss.

The increase which was supposed to be effected on July 1st was suspended following outcry and the non-approval of NERC before the advisory was made.

But NERC in a statement last week said, based on the 2023 Electricity Act and other extant rules, the 11 DisCos filed an application for rate review with the commission.

It stated that the request was premised on the need to incorporate changes in macroeconomic parameters and other factors affecting the quality of service, operations and sustainability of the companies.

Speaking with Daily Trust, the Executive Director of PowerUp Nigeria, an energy consumer advocacy group, Adetayo Adegbemle, while noting that the meeting is a formality as NERC and the Discos have agreed on the tariff raise, said the commission needs to regulate the sector with the view of ensuring Nigerians pay for what they consume.

Adegbemle, who advocates for the suspension of the upward review said the previous assurance by the DisCo to improve their services has been on paper without proper metering of existing customers on their networks.

“Taking into consideration the present economic situation, the recent removal of fuel Subsidy and floating of Naira, I would have rather NERC calls up other conditions for tariff review that we have been dodging before into play now. All previous tariff reviews have NEVER met its expectations, despite all the promises on paper made by the Discos and NERC.”

“Therefore, all tariff reviews should be suspended until all Disco meets up to 70 percent metering and Discos can increase collections by 50 percent of their present ability.” Let the condition triggering Tariff Review be performance based. If you Meet the Metering Gap by a percentage, you can then qualify for tariff review.”

He added that the country can benefit from the debt owed to the DisCos if there are incentives for collection.

On his part, President of Nigeria Consumer Protection Network, Kunle Kola Olubiyo, said the meeting is a talk shop and smokescreen designed to window dress a decision that has already been taken and concluded by NERC and the DisCo.

He said the country has over six upward reviews of electricity tariff without a corresponding increase in service delivery with power generation, transmission and load dispatch and evacuation and energy load utilisation

While stating that the spiral effects of recent fiscal policies of the government have led to high inflation and depreciation of the Naira, he said poor investment in Capital Expenditure (CAPEX) due to Capping Distribution Licensees allowable by NERC has led to near zero mechanism for cost recovery of investment in network improvement projects which are mostly funded by customers.

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