Revisiting the ‘New Electricity Tariff Regime’

Revisiting the ‘New Electricity Tariff Regime’

By Isah Ismaila Gagarawa

AREWA AGENDA – It may be recalled in January, the Nigerian Electricity Regulatory Commission (NERC), announced that there would be an increase in electricity tariff across the country in April. Similarly, President Muhammadu Buhari directed the commencement of a nationwide mass-metering program as part of his efforts to end estimated and arbitrary billing for electricity.

This directive of the president is said to be in line with the growing concern to adequality ensure the welfare of the masses and to make sure that all those that do not have meters are provided with as early as possible at reasonable costs.

The NERC Chairman, James Momoh, appealed to the public and all stakeholders in the power sector to disregard any reports of any subjective form of tariff increase affecting Nigerians while maintaining that the measures are in place to protect the poor and vulnerable in cases of tariff reviews.

The NERC boss, said, “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.”

For now, electricity distribution companies (DisCos) across the country, has commenced the implementation of a new tariff regime. The new tariff hike was said to be authorized by President Muhammadu Buhari after an ad-hoc committee was set up to review the tariff in the month of June.

The committee said the increment is due to the need to raise the power tariff because there was no budgetary provision to subsidize the power sector in the 2020 revised budget.

The hikes in the different electricity rates according to series of the tariff hike notices from the DisCos, were duly approved by NERC for the next four months. Even though NERC noted that the new tariff order will end on January 1, 2021, when sources in the power industry are expected to approve another hike for the power firms, affected customers, unions and relevant stakeholders have revolted against the increase.

Abuja Electricity Distribution Company (AEDC), Kano Electricity Distribution Company (KEDCO), Ikeja Electricity Distribution Company (IEDC) among others, had commenced implementation across its franchise areas. They all claimed that the increment would result in longer hours of power supply.

Meanwhile, the hike in the electricity tariff has resulted in uproars from the masses, customers and relevant stakeholders affected condemning the increment. A group called the All Electricity Protection Forum had threatened to sue the Nigerian Electricity Regulatory Commission (NERC) if the recent increment in electricity tariffs is not reversed.

The Lagos based union through its PRO, Mr. Gideon Balogun, decried the increment of the tariff as announced by the electricity Distribution Companies saying it is unjustified because the DisCos had not met the conditions of Section 76 (2) (b) of the Electric Power Sector Reform Act.

The union has demanded the immediate reversal of the tariff increment and proper implementation of capping method order 197/2020 which will fast track the metering of consumers by the DisCos as urged by the President.

Similarly, the Nigerian Labor Congress has denounced the increment in the electricity tariff calling on NERC to take decisive action. Mr. Ayuba Wabba, the NLC President said the “Increase is taunting to the will of the masses”.

Wabba said that the organized labor would mobilize Nigerian workers to resist the increase as the union totally rejects any plan to inflict further pain on Nigerians at this very time of great economic distress.

He maintained that each hike in electricity tariff in Nigeria was trailed by a huge leap in hours of darkness, de-metering of more Nigerians, and exponential rise in incidences of estimated billing.

Simultaneously, affected masses have described the increase as a purposeful effort to further increase the difficulties they are passing following months of COVID-19 lockdown which has preempted business activities and brought it to a standstill.

Following the criticisms from Nigerians on this matter of grave concern, DisCos must ensure that the electricity supply is improved because if the supply is not improved significantly, it would only increase economic hardship.

If it is however improved and consumers have stable electricity supply nationwide, they might be encouraged to pay the increased tariff.

As such, NERC on their part should reconsider and probably reverse the tariff hike bearing in mind the current challenges of the people due to the coronavirus pandemic.

As for the government, it must supervise and fast-track the provision and availability of prepaid meters to the masses with the aim of halting estimated and arbitrary billing.

Gagarawa, a journalist writes from Abuja.

Agenda is a Publication of young writers from Northern Nigeria towards peaceful coexistence and national development through positive narratives.