says tariff now N23 per kilowatt
Despite sustained complaints by electricity consumers nationwide against spurious monthly billings by the electricity Distribution Companies (Discos), Nigerians would still pay more on electricity consumed since July 1 this year.
Indications about the arrears of payment emerged yesterday at a consultation meeting with the stakeholders in the Nigeria Electricity Supply Industry (NESI) – generation companies, distribution companies and consumers’ forum at Abuja.
The Chairman of the Nigeria Electricity Regulatory Commission (NERC), Dr Sam Amadi, hinted that the suspended Multi Year Tariff Order 2, MYTO 2, which was to become effective from July 1 but was kept in abeyance as a result of transition in government, would be unlocked and consumers would pay the arrears.
Noting that currently the average tariff has dipped from N26 to N23per kilowatt based on market forces, the industry regulator said even with the development, consumers would pay higher for electricity in the months ahead.
Amadi, who corroborated his disclosure on the current tariff in the market with the R2 Abuja customers who now pay N14, said when the MYTO finally commences, they might pay up to N19 per kilowatt if the new tariff is approved.
According to him, the new tariff would take effect retroactively from July this year.
He said: “The good news is that the average tariff has come down from N26 to N23. That is the good news. For us, if it goes up, we say it goes up. If it goes down, we say it goes down.”
Amadi however recalled that the tariff, which should have taken effect from July but was frozen in June would now be unlocked based on the stability in the market.
According to him, the Discos would present their different proposed tariffs to the commission which it would in turn present to the Presidency for approval.
Commenting on how the new tariff would look like, the chairman said, “By January last year R2 customers were supposed to pay N19 in Abuja. They are paying N14. Today with the analysis, instead of N18, it should be N19. There is a reduction. But it doesn’t mean that at the end of the day they will still be paying that N18.”
The four factors that the commission considers in tariff review are gas prices, exchange rate, inflationary rate and generation capacity.
In her presentation, Principal Manager, Market Competition and Rates, Aisha Mahmud, noted that the commission obtained the data for the computation of the Bi-Annual Minor Review from the website of the Central Bank of Nigeria.
According to her, inflation rate from the apex bank as at 30th April, 2015 was 8.3 per cent.
She added that the Multi-Year Tariff Order 2 had an assumption of 13 per cent inflation rate but after the 2014 minor review, the inflation rate was reviewed down to 7.8 per cent.
On exchange rate, the CBN website, she said, showed an exchange rate of N197 to $1 as at 30th April, 2015.
But the proposal took an exchange rate premium of 197+1 per cent.
The commission in the proposal observed that price had increased from $2.50 from $1.50 and gas transportation of $.80.
Mahmud said that there was now an average peak daily generation capacity of 3,832MW while average energy sent out is 3,404MW.
In all, the commission said that following the increase in energy generation, the electricity distribution companies were now generating more revenue thereby necessitating a slash in the tariff from N26 to N23 per kilowatt consumed.
In Oyo State, Electricity consumers in Ibadan, the state capital and other states under the Ibadan Electricity Distribution Company, IBEDC, yesterday warned the distribution company, against further increment of electricity tariff and other charges.
The consumers who expressed their disappointment over the abnormal electricity charges, gave the warning in Ibadan, the Oyo State capital, during a stakeholders meeting organised by the IBEDC.
The complaints of the customers who preached against indiscriminate charges on their meters and outrageous bills from the distribution company, forced the IBEDC to hurriedly bring the meeting to an end.
One of the customers and Baale of Ekotedo, Chief Taiwo Ayodinde, warned the distribution company which he said was performing below the expectations of the people against further increment to avoid crises in the sector and outrage among the aggrieved populace.
Another customer who preferred anonymity, while speaking with journalists, said “I don’t know the reason for this meeting. What have they achieved? The company did not achieve anything in this meeting, they just organised it for formality sake because they have been compelled to do it. You can see that people are not happy with the company, some of these distribution companies are not doing well, if it is possible for the government to reverse the selling of the PHCN to these companies, it is better to do that fast.”
Efforts to speak with the representatives of the company to make clarifications on the grievances of the consumers and the importance of the meeting on the consumers and the company proved abortive.
In a related development, electricity consumers in Plateau State yesterday met in Jos, to fine-tune ways of improving services in the state and other areas.
The forum was called at the instance of Jos Electricity Distribution Company (JED) which provides electricity to four states of Plateau, Benue, Bauchi and Gombe.
Executive Director of JED, Marketing and Investment, Mr. Verr Jırbo, told the gathering that for the states to continue to enjoy improved services there was the need for the existing tariff regime to be reviewed to enable the company meets up with its obligations.
He explained that the current economic realities which pushed up the cost of service materials, including gas and the steady deprecation of the naira against the dollar were hindering their operations and effectiveness, hence the need to review the existing electricity tariff to enable them continue in business.
He said: “When we started operation about 21 months ago, it was N156 to a dollar, but now, the exchange rate has changed. Gas which we need for our services is on the high side. We may not continue to deliver services if the situation remains like this,” the director said.
But most of the customers who spoke at the forum resisted the planned tariff review.
They maintained that although the company had improved on its services lately, it was not enough to warrant any upward review of the current tariff regime.
Some of the problems which they insisted must be addressed by the company include outrageous bills, problem of prepared meter, erratic power supply, poor response to customers’ complaints among others.
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