The Nigerian Electricity Regulatory Commission, NERC, has stated that there will be an increase in the electricity tariffs being paid by consumers from April this year
This disclosure was made in its December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020. According to NERC, 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.
A statement on the website of the regulatory body read, “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.” “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 TCN and administrative charges until April 2020 at the rates applied in generating MO invoices for the period of January to October 2019.” Meanwhile, Power supply has dropped from 3,993.65 megawatts, MW, to 3,608 MW, indicating a drop of 385.65 MW, because of many challenges, including inadequate gas, poor transmission infrastructure and limited distribution facilities. The latest report, obtained by Vanguard from the office of Vice President Yemi Osinbajo, stated: “On January 2, 2020, average energy sent out was 3,608 MW/Hour (down by 385.65 MW from the previous day). 2,026.5 MW was not generated due to unavailability of gas.” It added: “60 MW was not generated due to unavailability of transmission infrastructure, while 2,417.1 MW was not generated due to high frequency resulting from unavailability of distribution infrastructure. The power sector lost an estimated N2, 162,000,000 (Two Billion One Hundred and Sixty Two Million Naira) on January 2, 2020 due to constraints from insufficient gas supply, distribution infrastructure and transmission infrastructure.” Investigation by Vanguard showed that the development has compelled the Electricity Distribution Companies, DISCOs, to embark on loading nationwide.