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Electricity tariffs grow threefold in four years

Electricity tariffs grow threefold in four years

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Electricity tariffs have increased by more than 300 per cent in the last four years, investigation has shown.

Although the government has always predicated increases in tariffs on the need for appropriate cost for better service delivery to the citizens, consumers continue to rue poor services.

Within the period of time, electricity generation has remained poor while distribution has been even poorer.

Between 2015 and 2019, the average electricity tariff climbed from N12 kWh to about N32kWh and is slated to go up again by about 30 per cent in 2020.

Investors that took over the running of the electricity distribution carved out from the defunct Power Holding Company of Nigeria in 2013 demanded a cost-reflective tariff.

In June 2015, the Nigerian Electricity Regulatory Commission issued new electricity tariffs that became effective for commercial and industrial consumers from  April 1, 2015.

The NERC also declared that the tariff for residential consumers would become effective from July 1, 2015.

It said the new tariffs were in the Multi-Year Tariff Order – MYTO 2.1 – for the period April 1, 2015 to December 2018 and they replaced the tariffs in MYTO 2.

NERC stated that the charges in its new order were in two parts. There was a fixed monthly charge and there was a charge for electricity consumption, the energy charge, which was measured in kiloWatt-hour.

Fixed charge was the component of the tariff that committed electricity consumers to paying an approved amount of money not minding whether electricity was consumed during the billing period or not.

The charges for residential consumers using single phase or three-phase meters in category R2 were given.

Taking those of four electricity distribution companies, Benin, Ibadan, Ikeja and Eko Discos, NERC revealed that power users would have to pay their bills depending on what obtained in their respective Discos.

For Benin Disco, the fixed monthly charge for residential R2 category was N750. The energy charge rose from N12.54/kWh to N18.46/kWh, an increase of 47 per cent, on 1 July 2015.

Ibadan Disco had a fixed monthly charge for residential R2 category of N625 in 2015. The energy charge rose from N14.23/kWh to N18/kWh, an increase of 26 per cent.

For customers served by Ikeja Disco, the fixed monthly charge for residential R2 category was N750 in 2015. The energy charge rose from N13.61/kWh to N14.96/kWh.

Eko Disco got a fixed monthly charge for residential R2 category of N750 in 2015. The energy charge rose from N12.87/kWh to N18.75/kWh, an increase of 45 per cent.

 Tariff adjusted upwards again

Last week, The PUNCH reported that the Federal Government through NERC had increased the tariff payable by power consumers across the country beginning from 2020.

Beginning from next year, power consumers will have to pay an additional sum of between N8 and N14 for every kilowatt-hour of energy provided by their respective distribution companies.

The increases reflect about 30 per cent variation in current prices.

Despite the increases in tariffs, Nigeria’s power generation has continued to hover between 3,500 megawatts and 4,000MW since the sector was officially privatised in November 2013.

Figures obtained from the Federal Ministry of Power on Tuesday showed that the country’s peak power generation for the preceding day was 4,104MW. This, however, dropped to a low of 2,905.4MW on the same day.

The highest peak power generation ever attained in Nigeria was recorded on February 7, 2019, when the country’s power generations firms delivered 5,375Mw of electricity to the national grid.

Apart from the lapses in power generation, the distribution of electricity in Nigeria has also not improved as expected.

This is one of the major reasons why the Transmission Company of the Nigeria has repeatedly called for the recapitalisation of Discos.

Power distributors, on the other hand, have been calling for a cost reflective tariff to enable them to have the required funds to expand their networks, an argument that consumers have always kicked against.

The Nigeria Electricity Consumers Advocacy Network and the Electricity Consumers Association of Nigeria accused NERC of failing to consult with stakeholders before putting together the recent increase in tariffs.

In separate interviews with our correspondent on Tuesday, the Chairman, NECAN, Tomi Akingbogun, and the President, ECAN, Chijioke James, stated that the standard practice before any increase in tariff was for NERC to consult with stakeholders.

“We were not consulted before they (NERC) went ahead with the increase and this is against the standard procedure,” Akingbogun stated.

James said NERC failed to carry out proper consultations, adding that that the service provided by power firms had not improved.

 

 

 

 

 

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