Tag Archives: NERC

NERC approves ‘No increase in electricity tarrif’ for poor Nigerians.

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The Nigerian Electricity Regulatory Commission (NERC) on Wednesday said it is committed to ensuring that “poor and vulnerable” Nigerians do not experience any undue increase in electricity tariff.

According to a statement signed by the Commission’s Chairman, James Momoh, electricity distribution companies (DISCOs) can only increase prices only after customers have been consulted and metered.

The DISCOs must also commit to increasing the number of hours of electricity supply per day.

“This means that unmetered customers will not experience any cost increase beyond what is chargeable to metered customers in the same area,” Momoh said.

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“Even under the above conditions, there will be no change in tariffs for the most vulnerable as tariffs for those consuming 50KW or less remain frozen.

“Customers receiving less than 12 hours of supply will also not experience any change in tariffs.”

Also on Wednesday, Minister of Power, Sule Mamman, announced that President Muhammadu Buhari has approved a one-year waiver of import levies on electricity billing meters.

The move is expected to speed up the process of supplying customers across the country with meters and end estimated, arbitrary billing.

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READ THE NERC CHAIRMAN’S FULL STATEMENT:

PRESS RELEASE: NERC COMMITTED TO PROTECTING CUSTOMERS

In response to media reports that there is an increase in tariffs for Nigerians, NERC wishes to clarify that tariff reviews going forward will only follow service-based principles. Under these service-based principles DISCOs will only be able to review tariff rates for customers when they consult with customers, commit to increasing the number of hours of supply per day and quality of service.

In all cases poor and vulnerable Nigerians will not experience any increase. In line with these expectations, DISCOs are directed to engage with their customers on a Service Based Tariff structure. Under the Service Based Tariff Structure, DISCOs can only review tariffs for customers under the following conditions:

Customers are consulted and communicated a guaranteed level of electricity service by the DISCOs based on hours of supply
Customers are metered

No estimated billing through the strict enforcement of the capping regulation. This means that unmetered customers will not experience any cost increase beyond what is chargeable to metered customers in the same area.

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Even under the above conditions, there will be no change in tariff for the most vulnerable as tariffs for those consuming 50KW or less remain frozen. Customers receiving less than 12 hours of supply will also not experience any change in tariffs.

In addition, the President has directed that there should be a nationwide mass-metering program in an effort by the Federal Government to put a stop to estimated and arbitrary billing for electricity. He has also approved a waiver of the import levy on meters, so that those that do not have meters can be supplied as early as possible at reasonable costs.

The general public and all stakeholders in the power sector are by this statement urged to disregard any reports of an arbitrary tariff increase affecting Nigerians.

James. A. Momoh
Chairman, Nigerian Electricity Regulatory Commission


#Newsworthy…

Nigeria: Electricity tariff to increase from April 1, 2020.


Nigerians will from Wednesday, April 1, 2020, pay more for electricity, NobleReporters reports.

The Nigerian Electricity Regulatory Commission had disclosed this in its December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020.


Checks by NobleReporters on Monday showed that the decision to increase tariff had not yet been suspended despite the lockdown occasioned by the COVID-19 pandemic.

A top source at Ikeja Electric siad that the firm had not received any directive from NERC as regards reversal of the plan.


He said, “According to the tariff order for the year, we are supposed to increase on April 1, 2020. So far, we have not received any directive not to go ahead.”

Efforts to get NERC to speak on the matter were not successful on Monday as the spokesman for the commission, Usman Arabi, said he was not around but on a course at the National Institute for Policy and Strategic Studies.


Arabi’s substitute, however, did not respond to calls or a text message sent to him.

NERC had disclosed in its December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 that the order was issued to reflect the impact of changes in the minor review variables in the determination of cost-reflective tariffs and relevant tariff and market shortfalls for 2019 and 2020.


The commission said the order also determined the minimum remittances payable by the distribution companies in meeting their market obligations based on the allowed tariffs.

It said, “The Federal Government’s updated Power Sector Recovery Programme does not envisage an immediate increase in end-user tariffs until April 1, 2020, and a transition to full cost reflectivity by end of 2021.


“In the interim, the Federal Government has committed to funding the revenue gap arising from the difference between cost-reflective tariffs determined by the commission and the actual end-user tariffs payable by customers.”

According to NERC, all Discos are obligated to settle their market invoices in full as adjusted and netted off by applicable tariff shortfall.

It said, “All FGN intervention from the financing plan of the PSRP for funding tariff shortfall shall be applied through NBET and the market operator to ensure 100 per cent settlement of invoices issued by market participants.

“Effectively, this order places a freeze on the tariffs of the TCN and administrative charges until April 2020 at the rates applied in generating MO invoices for the period of January to October 2019.”


#Newsworthy…

VAT: BEDC improve power supply


The Nigeria Labour Congress (NLC) yesterday said it would mobilise Nigerians to resist any form of increment in the electricity tariff, be it in form of Value Added Tax (VAT) or others.

This is even as it said it has nothing to do with the ongoing public hearing on the proposed increase in the electricity tariff across the country.

President of the Nigeria Labour Congress (NLC), Ayuba Wabba, who spoke in Lagos yesterday warned that the labour centre would not support any increase in the electricity tariff as it would further impoverish Nigerians.

Continue reading VAT: BEDC improve power supply

Femi Gbajabiamila react to increment of electricity tariff

…says should be increased after criminalising estimated billing

…rejected the proposed increment


The Speaker of the House of Representatives, Femi Gbajabiamila, has rejected the proposed increment of electricity tariff in the country.

His reaction came one week after Channels Television reported that the Nigerian Electricity Regulatory Commission (NERC) approved the immediate review of electricity tariffs across the country.


In a series of tweets on Friday, Gbajabiamila believes the right time to increase electricity rates is when the proposed amendment to the act criminalising estimated billing is signed into law.

He promised to meet with the Attorney General of the Federation and the Minister of Justice, as well as other stakeholders to ensure the proposed increase was made on a practical basis.


The Speaker said, “There is no guarantee that after any electricity tariff hike the DISCOs will not continue with the nefarious practice of bills estimation or provide uninterrupted power supply.

“I believe the National Assembly should ensure that any increase in electricity tariff if at all, should be cost-reflective and not just a whimsical increase with no empirical basis.”


“Also, any such increase should only be made after the proposed amendment to the law criminalising estimated billing is signed into law.

“I intend to meet and discuss this sequence and other conditions with the Attorney General of the Federation and other relevant authorities,” he added.


In a series of documents dated December 31, 2019, NERC had announced the plan to increase electricity tariff effective January 1, 2020.

A review of the new amount to be paid by various categories of electricity consumers shows an increase that ranges from 59.7 per cent to 77.6 per cent.


Consumers classified as residential (R1) were, however, excluded from the review as the N4 per kWh they pay was left unchanged.

The development affected customers captured in the 11 Distribution Companies (DISCOs) spread across the country such as Abuja DISCO, Benin DISCO, Enugu DISCO, and Eko DISCO.


Others are Ibadan DISCO, Ikeja DISCO, Jos DISCO, Kaduna DISCO, Kano DISCO, Port Harcourt DISCO, and Yola DISCO.

The decision, however, sparked an outcry in the country, forcing the electricity regulatory body to shift the implementation of the review until April.

Speaker of the House of Representatives, Femi Gbajabiamila


NERC Chairman, Professor James Momoh, told reporters on Monday that the commission would engage the public on the planned review in the next three months, before deciding on any implementation.

He also said NERC would begin the regulation of estimated billing by electricity distribution companies who fail to provide meters for their customers.


#Newsworthy…

Buhari says he will not intervene in electricity increment by NERC – Femi Adeshina


The Special Adviser to President Muhammadu Buhari on media and publicity, Femi Adesina has revealed why the Nigerian leader can’t intervene in the decision of the National Electricity Regulatory Commission (NERC) to increase electricity charges.

According to the Presidential spokesperson, the decision to increase electricity tariff is within the purview of the Ministry of Power and NERC and President Buhari can only be consulted as last resort.


Femi Adesina who appeared on Channels Television’s Politics Today programme on Monday January 6, added that it is too early for President Buhari to wade into the matter.

He said;


“The matter is strictly not within the purview of the President but the ministry of power and National Electricity Regulatory Commission.

“Besides, the ministry had already explained that any adjustments to the tariff will only take effect from April. So, let’s leave it at that for now.

“It’s rather too early to ask the president to wade in at this time. He should only be consulted as a final resort.

“The federal government will ensure the interests of the public are protected regardless of any new policy implemented.”


#Newsworthy…

Increased pay for electricity, essential to boost power distribution – NECA


The Nigeria Employers’ Consultative Association (NECA) says the proposed hike in electricity tariff is necessary to get the power sector back on track.

Its Director-General, Mr Timothy Olawale, said on Monday in Lagos that putting the tariff concerns in context, the issue of the increment was intended to enable the sector realise the right price for the product.

Olawale explained that cost reflective tariff was important to ensure that provider of the commodity or service could cover operational and capital expenses in order to stay in business and deliver on service


“The issue of tariff has remained topical in the sector since shortly after privatisation.

“The Nigerian Electricity Regulatory Commission (NERC) has said that the electricity tariffs being paid by consumers would increase in April this year.


“NERC disclosed this in its ‘December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020, which was dated Dec. 31, 2019.

“Though, the proposed increase in tariff might cause a shock from the consumers’ perspective, it is, however, a necessity in order to get the power sector back on track.


“While customers have said the tariff review should only take place after there has been improvement in service, service providers have said for service to improve, the right amount has to be paid.

“The argument has always been a cyclical one, but putting the matter in context, therefore, the issue of the increase is intended to enable the sector realise what can be described as right price for the product.


“It is with this right that more investment can be attracted and consequently, improved service,” he said.

On the challenges of regular power supply and imperative for appropriate pricing of electricity, the NECA boss said that tariff reviews were expected.


“There had been minor and major reviews to adjust all the variables that make up the tariffs such as generation volumes, forex price and all these play a role in determining the tariffs.

“NERC, for some reasons, had delayed implementation of minor reviews that should normally occur bi-annually by regulation.


“The NERC tariff order in June 2019 took all these into account and adjusted the variables to ensure a cost reflective tariff.

“While the Discos have had six minor reviews, totalling 16 per cent, micro and macro-economic indices have affected the ability of the DisCos to meet their cost.


“However, the Generation Companies has had several reviews bringing their percentage increase to about 116 per cent,” he said.

While urging the DisCos to justify the proposed tariff hike, Olawale said that consumers and businesses were not opposed to paying appropriate price for electricity consumed.

According to him, the major contention has been estimated and sometimes outrageous billing for power not consumed, with implication on cost of living and cost of doing business without a guarantee of commensurate improvement in quality of service.

“The DisCos would do well to fast-track the provision of prepaid metres, the GenCos should ensure availability of power for the DisCos to distribute and government should support the DisCos to curb the rampant incidences of electricity theft across the nation,” he said.


#Newsworthy…

NERC: Increased electricity tariff to take effect as from April – Chairman


NERC Chairman, Professor James Momoh, addressing a news conference in Abuja on January 6, 2020.

Following an outcry over the decision to increase electricity tariffs in the country, the Nigerian Government says the implementation will commence in April.


The Chairman of the Nigeria Electricity Regulatory Commission (NERC), Professor James Momoh, stated this while addressing a news conference on Monday in Abuja, the nation’s capital.

On Saturday, Channels Television reported that NERC has approved the immediate review of electricity tariffs across the country.


A series of documents dated December 31, 2019 indicate an increase that ranges from 59.7 per cent to 77.6 per cent.

The increase affects all categories of electricity consumers, except those classified as residential (R1) whose N4 per kWh charge was left unchanged.


According to the documents jointly signed by Professor Momoh and the Commissioner for Legal, License, and Compliance, Dafe Akpeneye, the NERC said the reviewed tariffs were effective January 1, 2020.

The development affects the 11 Distribution Companies (DISCOs) in the country such as Abuja DISCO, Benin DISCO, Enugu DISCO, and Eko DISCO.


Others are Ibadan DISCO, Ikeja DISCO, Jos DISCO, Kaduna DISCO, Kano DISCO, Port Harcourt DISCO, and Yola DISCO.

This sparked widespread criticism of the government, apparently forcing the NERC to make further clarification on the controversy.


At Monday’s press conference, Professor Momoh explained that the review of the Multi-Year Tariff Order (MYTO) does not mean an immediate increase in tariff for electricity consumers.

He added that the commission would engage the public on the planned review in the next three months, before deciding on any implementation.


The NERC boss also said the electricity body would begin the regulation of estimated billing by electricity distribution companies who fail to provide meters for their customers.

In a bid to further explain the rationale behind its decision, the regulatory body issued a statement.


Read the statement below:

TARIFF REVIEW CLARIFICATION.

We make this statement to inform all our esteemed customers that we are not unmindful of news making the rounds that Electricity tariffs have been increased effective January 1 2020 as reported in some print and electronic media.


For clarity and improved understanding, we state the following points:

The Nigerian Electricity Supply Industry (NESI) is primarily regulated by the Nigeria Electricity Regulatory Commission (NERC).


NERC is empowered by the EPSR Act (EPSRA) to make Orders and Declarations in a manner promoting efficiency and sustainability within the NESI.

NERC is empowered by EPSRA to carry out minor reviews of the Multi-Year Tariff Order (MYTO) 2015 (the Electricity Tariff), twice a year.


An accurate electricity tariff assists greatly in ensuring efficient power supply delivery from the different stages of the electricity process, from Generation through Transmission to Distribution, as it assures stakeholders and participants of their costs recovery and return on investment. This makes the business viable.

NERC has just reviewed the MYTO 2015 and has published an Order on Tariffs and Minimum Remittance for Jan-June 2020.


The tariffs anticipate changes in the currency exchange rates between the United States and Nigeria, changes in the rate of inflation and Gas prices.

The Tariffs shall remain the same as they presently are (i.e. 2015 levels) until April 01 2020 when there will be a slight increment to cater to tariff shortfalls which shall be gradually passed on to the consumer until this is fully completed by the end of 2021.

NERC Chairman, Professor James Momoh


In view of the foregoing, we state emphatically that there shall be no change or increase in the existing Electricity tariff until April 01 2020 when the new adjusted tariffs shall begin to gradually reflect the dynamism of our macro-economy.

We sincerely hope that this statement substantially clarifies the accurate position and allays any fears and concerns, our esteemed customers may have.

We thank you for your continuing patronage.

Signed.

ANED


#Newsworthy…

There is no plan of increment in electricity tariff yet – NERC


The Nigerian Electricity Regulatory Commission (NERC) has denied media reports that it plans to increase electricity tariff soon.

In a statement released and signed by its spokesperson, Usman Arabi, the NERC says it has no immediate plans to increase electricity tariff.


”The attention of the NERC has been drawn to the publication in several electronic and print media that end-user electricity tariffs have been increased following the approval of the minor review (2016 – 2018) of the 2015 Multi Year Tariff Order on Aug. 21, 2019. We wish to provide guidance that the minor review implemented by the commission was a retrospective adjustment of the tariff regime released in 2015.

This is to account for changes in macro-economic indices for the years 2016, 2017 and 2018 thus providing certainty about revenue shortfall that may have arisen due to the differential between tariffs approved by the regulator and actual end-user tariffs.

The commission therefore wishes to notify the general public that no tariff increase has been approved by the commission vide the order.”

The statement further added that the NERC, in the discharge of its statutory responsibilities enshrined under the Electric Power Sector Reform Act, would continue to undertake periodic reviews of electricity tariffs in accordance with the prevailing tariff methodology and that the commission will widely consult with stakeholders on electricity tariff increment whenever the need arises.


#Newsworthy…

Electricity to cost more as NERC agrees with DisCos


It has emerged that Nigerians will henceforth be paying more for power following the directive given to 11 electricity distribution companies aka (DisCos) by the Nigerian Electricity Regulatory Commission (NERC) to raise electricity tariff beginning from January 1.

According to a report gathered from Cable newspaper online, “James Momoh, NERC chairman, and Dafe Akpeneye, its secretary, gave the directive in a memo sent to the DisCos.


“The commission had published the new tariffs for the different DisCos and categories of customers on its website via an order dated December 31.

“According the order, the new tariff was reached based on data obtained from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) and the US rate of inflation.”


It quoted the commission as saying that “other orders issued on the subject matter, and shall take effect from 1st January 2020 and shall have an effect on the issuance of a new Minor Review Order or an Extraordinary Tariff Review Order by the NERC.”

According to the paper, for instance, ‘“Abuja Electricity Distribution Company (AEDC) residential customers R3 that were paying N27.20 per unit will now pay N47.09.


‘For the Ikeja Electricity Distribution Company (IKEDC) customers, the R3 category paying N26.50 per unit will now pay N36.92 per unit.

“An increase was also recorded in the commercial customers C3 category that paid N24.63 per unit in 2015. They are now expected to pay N38.14 per unit.


“The industrial customers of the IKEDC D3 category who paid N25.82 per unit, the charges have been increased to N35.85 per unit.

“Enugu Electricity Distribution Company residential (R3) customers who were paying N27.11 per unit in 2015 are to now pay N48.12 per unit.


“The commission also directed the DisCos to complete settlement of market invoices.

‘“All DisCos are obligated to settle their market invoices in full as adjusted and netted off by the applicable tariff shortfall,” it read.

‘“In the determination for compliance to the minimum remittance threshold in this Order, the commission shall consider verified receivables from MDAs for the settlement period and DisCos’ historical collection efficiency for MDAs.

‘“The commission shall hold the TCN responsible for deviation from the economic dispatch Order that adversely impact on the base weighted average cost of the wholesale of energy.”’


#Newsworthy…