Reps to probe utilization of N231bn stabilization fund

The House of Representatives on Thursday resolved to investigate the utilization of N231 billion provided to operators under the Nigerian Electricity Market Stabilization Fund initiated by the immediate past administration.

The resolution was passed sequel to the adoption of the motion on the need to evaluate Multi Year Tariff Order (MYTO) sponsored by Shehu Musa (APC-Bauchi).

Section 76 of the Electric Power Sector Reform Act (EPSRA), 2005 provides for the National Electricity Regulatory Commission (NERC) to adopt an appropriate tariff methodology which, among other general tariff principles, shall allow for the recovery of efficient costs, including a reasonable rate of return to the power sector and provide incentives to market operators to improve efficiency and quality of power supply.

In his lead debate, Musa noted that “in 2008, NERC adopted the MYTO methodology to regulate electricity tariff and the tariff setting process in consultation with industry stakeholders, labour and consumer groups to provide a correct pricing of electricity, taking into consideration the key principles of cost reflectivity, affordability, incentives for efficient operations and other assumptions such as interested rates, exchange rates, inflation, gas prices and subsidies.

“The House is concerned that the new tariff regime which intends to provide for residential and commercial consumers a new, affordable and acceptable price continues to increase from an average of N10 per kWh (RI) in 2008 to an average of N24.20 per kWh (RI) in 2017 without significant improvement in power supply.

“The House is also concerned by the quantum of public outcry over the continuous increase in the price of a unit of electricity set under this new regime, despite the N213 billion Nigerian Electricity Market Stabilization Fund provided by the Federal Government as subsidy to the industry operators.

“The House is further concerned that even the present fixed price unit of electricity is said to be underpriced and that plans are underway to gradually increase the tariff to cover full costs.

“Equally concerned that the new tariff is not in tandem with the economic realities of Nigeria, coupled with the attendant untold hardship being experienced by Nigerians due to the collapse of small and medium scale businesses and industries,” Musa stressed.

To this end, the House resolved to set up an Ad hoc Committee to interface with NERC and other stakeholders to critically evaluate the MYTO system and re-assess all its inputs and assumptions in order to come up with a realistic and acceptable tariff regime.

The Ad hoc Committee which is to be constituted before the House embark on two month annual recess, is expected to report back within six weeks for further legislative action.

 
KEHINDE AKINTOLA, Abuja