The Nigeria Electricity Regulatory Commission (NERC) has jettisoned the Multi Year Tariff Order (MYTO) with which it regulates the cost of electricity in the Nigeria Electricity Supply Industry (NESI).
James Momoh, chairman of Nigeria Electricity Regulatory Commission (NERC) said in an interview in Abuja that the purpose of the MYTO is to set cost-reflective tariffs which will allow the power sector to be properly funded and functional.
Momoh said the commission under his watch, shall not adopt the MYTO software that was handed over to him because as a programmer, he does not believe in it. The essence of the method, he said, is to cross check whether consumers are being cheated with the computation.
He said he has already raised a team of first class workers in the commission to calculate what it costs to produce electricity from the gas to power plants to the generation front, distribution and finally to the consumers.
Multi Year Tariff Order (MYTO) is a methodology used for determining tariffs across the electricity value chain. MYTO sets a 15 year tariff path with bi-annual minor reviews (taking cognisance of macroeconomic indicators such as inflation rates, cost of fuel and exchange rate) and 5 yearly major reviews.
Since the change in the Government electricity subsidisation policy, and in order to ensure financial sustainability of the Electricity Supply Industry, the Electricity Regulatory Authority through consultation with stakeholders established a quarterly tariff review methodology.
STEPHEN ONYEKWELU
