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Why NERC refuses to lead campaign for electricity tariff review

More facts have emerged as to why the Nigerian Electricity Regulatory Commission (NERC) has insisted that electricity Distribution Companies (Discos) lead the campaign for servicing tariffs.

According to an official of the commission, the regulatory authority is not the one looking for tariff increase and as a result, it would not take the responsibility of telling the public about the development.

He says the regulator vehemently resisted the pressure for it to be the one that would lead the campaign, stating that servicing a reflective tariff is not its product but that of the electricity companies.

According to him, any of the companies that make reference to the NERC while enlightening the public about this development would be sanctioned.

“Discos should sell the tariff review to the public. They applied for it. They should own the business and sell the product by talking to their customers,” he says.

The development is service reflective and cost-reflective tariff, this is the position of NERC, he states.

Meanwhile, the management of the Ibadan Electricity Distribution Company (IBEDC) plc says as part of efforts to deliver excellent services to its customers, it will be implementing a tariff review beginning from July 1, 2020.

John Ayodele, the chief operating officer, in a statement, says 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 the quantity of power supplied as customers will only pay based on the availability of supply,” according to the statement.

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 explains 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 says.

“With this tariff, the company among 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,” he states.

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