January 29, 2023

FG overrules electricity tariff hike


The Federal Government yesterday di- rected the Nigerian Electricity Regula- tory Commission (NERC) to suspend
the tariff hike it approved recently.
The minister of Power, Engr Sale
Mamman who handed down the direc- tive said it was aimed at the paving way
for a successful conclusion of the ongo- ing dialogue between the federal gov- ernment and the labour unions.
The directive which was contained in
a statement issued yesterday ordered
NERC to ask all the distribution compa-
nies (DisCos) to revert to the tariffs that were applicable as at December 2020.

“To promote a constructive conclu- sion of the dialogue with the Labour
Centres (through the Joint Ad-Hoc
Committee), I have directed NERC to
inform all DISCOs that they should re- vert to the tariffs that were applicable
in December 2020 until the end of Jan- uary 2021 (when the FGN/Labour com- mittee work will be concluded).
“This will allow for the outcome of
all resolutions from the Committee to
be implemented together,” the minis- ter noted.

NERC had issued an order stating
that it had reviewed upward by a
margin of N2.00 and N4.00 per KWhr
respectively depending on the type of

A revised Multi-Year Tariff Order
(MYTO) signed by the new chairman of
NERC, Engr. Sanusi Garba, on Decem- ber 30, 2020, and sighted Tuesday in- dicated some percentage increase in the
tariff payable by customers of custom- ers of Ibadan DisCo with effect from 1st
January 2021, even as the commission
said this latest order supersedes the pre- vious Order NERC/2028/2020.

In the new Order NERC/225/2020,
the commission said it considered the
14.9 per cent inflation rate rise in No- vember 2020, foreign exchange of
N379.4/$1 as of December 29, 2020,
available generation capacity, US infla- tion rate of 1.22 per cent and the Capi- tal Expenditure (CAPEX) of the power
firms to raise the tariff.

The revised Service-Based Tariff
(SBT) also saw an increase in the rates
payable by all classes of electricity users unlike the one of November 2020, that exempted low power getters.
This is effective till June 2021 while
a Cost Reflective Tariff (CRT) expected
to raise the new cost higher will be ac- tivated from June to December 2021,
the NERC Order revealed.

This latest order has sparked a lot of
anger and criticism among consumers
across the country as they saw the at- tempt as a calculated one to exploit Ni- gerians even as they groan under epilep- tic power supply. This followed reports
in the media that the increment was
over 50 per cent, forcing the commis- sion to come out and deny approving
50 per cent increase in electricity tar- iff with effect from 1st January, 2020.