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Federal Government says it has no plan to significantly raise electricity tariffs

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The Federal Minister of Power, Sale Mamman on Friday said there is no plan to significantly raise electricity tariffs across the country.

The Minister made the announcement in reaction to the Nigerian Electricity Regulatory Commission said it was ready to conclude the “Extraordinary Tariff Review process” for the country’s 11 electricity distribution companies.

Recall that in a notice posted to its website on Monday, the Commission expressed its readiness to commence the processes for a minor review of the tariff in July, based on “changes in inflation, foreign exchange, gas prices, and available generation capacity” among other factors.

However, Mr. Mamman said NERC’s action is in accordance with Section 76 of the Electric Power Sector Reform Act of 2005.

“The tariff for customers on service bands D & E (customers being served less than an average of 12hrs of supply per day over a period of one month) remains subsidized in line with the policy direction of the Federal Government,” he said.

“Section 76 of the Electric Power Sector Reform Act of 2005 provides clear guidelines for the periodic review of tariff (based on market data and submissions from licensees).

The guidelines include the provision that the Commission shall give notice of activities related to tariff.

“The Multi-Year Tariff Order (MYTO) per NERCs regulation obtains inputs from operators in the market every 6 months to perform minor reviews and a major review is required every 5 years. Thus, as in January a minor review will occur in June. Given the timing for the Extraordinary review has also elapsed, a review will occur for consideration in January 2021,’.

“The Buhari administration remains faithful to the adopted resolutions from the Joint FGN-NLC/TUC Technical Committee on Electricity Tariffs which makes recommendations for “NERC to conduct an extraordinary review of the MYTO to further review factors and align them with current evolving realities.

“The reason this recommendation was posited by the Committee was to ensure that efficiencies could be derived from an extraordinary review to further reduce tariff.” he further stated.

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