Tariff Increase To Allow DisCos Pay For Gas, Maintain Machines – NERC
The rationale for the hike in the energy rate for Band A users has been provided by Musiliu Oseni, vice president of the Nigeria energy Regulatory Commission (NERC).
Following NERC's announcement earlier on Wednesday, users will now pay ₦225 kilowatts per hour instead of the existing ₦66.
In elucidating this on Channels Television's Politics Today on Wednesday, Mr. Oseni stated that the Commission is authorised by its Act to guarantee that licences that are operating profitably are permitted to obtain an adequate amount of revenue to cover their capital expenditures, operational expenses, and investment return.
Oseni continued, "What truly inspired the decision, aside from the Act's position, is that, if you look at December 2023, there was an improvement in service quality to January, but from January onwards, there was a decrease in generation availability.
Additionally, they won't be able to produce if they can't afford petrol, even though they also require money for machine maintenance.
We can now plainly see that the quality of supply won't improve if nothing is done to guarantee that the tariff is reviewed in order to allow the market to be reasonably liquid.
Oseni added that while band A users get roughly 20 hours of electricity a day, only they are impacted by the rate review.
But he claimed that prior to the tariff increase, 481 out of 3000 feeders in the Band A category had been reviewed, down from over 1000 feeders.
This represents almost 20% of all customers, he claims.
"We will soon be downsizing to less than 500 feeders from the present 800 that fall into the Band A category. As a result, 17% of applicants are now eligible for Band-A feeds. Only 15% of the total number of electricity users connected to these feeders are served by them.
"At a press briefing earlier in the day, Oseni announced the new tariff. The commission has issued an order which is titled April supplementary order and the commission allows a 235 kilowatt per hour."
