The management of Ibadan Electricity Distribution Company (IBEDC) Plc says as part of efforts to deliver excellent services to its esteemed customers, it will be implementing a tariff review beginning from the 1st of July 2020.
John Ayodele, the Chief Operating Officer, in a statement, said the objective of the review is to ensure that IBEDC adjusts its tariff in line with the current economic realities. This is required to meet the new Performance Improvement Plans (PIP) for Electricity Distribution Companies in Nigeria, as well as to achieve financial and fiscal sustainability in the Nigerian power sector.
“In order to provide more efficient and reliable service to customers, cost-reflective tariffs are required to cover the cost of critical investment in infrastructures and other parameters necessary for improved service delivery. This new tariff design is based on quantity of power supplied as customers will only pay based on availability of supply.” For example, the tariff design is based on service delivery, such that those receiving 20hrs supply daily will pay more than those getting 10hrs.
He also explained that, the company is very mindful of the challenging economic situation occasioned by the global pandemic COVID-19, but the macroeconomic facts of rising inflation rates and a volatile foreign exchange market compelled the implementation of the new tariff design. “The tariff review is to reflect macroeconomic indices in Nigeria and the global harsh economic realities facing the power sector”.
He said, with this tariff, the company amongst other things will be in a better position to roll out more meters, upgrade aging infrastructure and be more responsive to the complaints of its customers. We appeal for the understanding and cooperation of our esteemed customers as we are poised to serve you better.
Also in the same vein Ikeja is notify it customers that it is carrying out the same exercise in its franchise area from July 1, 2020.
It stated that the new tariffs, which are Service reflective, are end-user rates to be paid for electricity based on the level of service (including availability and reliability) provided to a cluster of customers.
“This is in line with our Performance Improvement Plan (PIP) across the entire network in the coming months and years. The different service levels to all categories of electricity consumers will also be accompanied by a change in tariff which has taken into cognizance changes in macroeconomic indices in the country. This will enable all the market players (Generation, Transmission, Distribution and gas suppliers) in the Nigeria Electricity Supply Industry cover cost of their operations and ensure improved service delivery.”
It says the plan is for the sector to gradually make a transition to a full cost-recovery market where the cost of services provided will be fully recovered. Services are also expected to improve within a very short time in customer service delivery, infrastructural upgrade, metering and technological solutions based on the level of investments that will be attracted, going forward.
“For the purpose of customer classification, customers will now be categorized into maximum demand customers (MD) and non-maximum demand (Non-MD) customers, and no longer the usual residential, commercial and industrial customer classes. All customers have now been clustered into different bands depending on the level of service currently being enjoyed.
Customers who are in the higher band currently being provided with good electricity supply will be expected to pay the true costs of the services being enjoyed while customers who are within the lower band and are not receiving optimal services would be expected to pay a much lower tariff pending improvements in services and the movement to a higher tariff band reflecting improved service delivery.