• Wednesday, July 24, 2024
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BusinessDay

DisCos further raise Band A electricity tariff, blame operating costs

Electricity reliability: When will the state wake up?

Electricity Distribution Companies (DisCos), on Wednesday, approved an increase in tariffs for Band A consumers, blaming high operational costs for the decision.

This is the second hike in electricity prices this year by DisCos, placing a further strain on businesses and industries that rely heavily on power.

Francis Agoha, acting managing director, Ibadan Electricity Distribution Company Plc, said in a statement seen by BusinessDay on Wednesday that the Nigerian Electricity Regulatory Commission had approved the tariff increase from N206.80/kWh to N209.50/kWh for users in the Band A category.

“Effective immediately, the tariff will be adjusted from N206.80/kWh to N209.50/kWh. This review has been duly approved by the Nigerian Electricity Regulatory Commission (NERC) as captured in the multi-year tariff supplementary order,” Agoha said.

“The adjustment is necessitated by several key economic indices, including fluctuations in the exchange rate, the current inflation rate, available generation capacity, and the cost of gas. These factors have significantly impacted operational costs, and the new tariff will mitigate these financial pressures while continuing to deliver high-quality electricity services.

“It is important to note that this adjustment affects only our Band A customers. The tariffs for Bands B, C, D, and E remain unchanged. We remain committed to providing reliable and efficient electricity services to all our customers across different bands.

“We understand that any change in tariffs can be a concern for our customers, and we assure you that this adjustment is necessary to maintain and improve the quality of our services. Our goal is to ensure that you receive the best possible value for your money,” Agoha said.

Read also: Nigeria hikes electricity tariff again for bigger consumers as complaints pile

Abdulazeez Abdullahi, head of corporate communications at Kaduna Electric, also informed customers of the increase.

“Dear esteemed customers, the Management of Kaduna Electric informs the public of an upward review in the tariff of Band A feeders from N206.80/kWh to N209.5/kWh,” Abdullahi said in a statement.

It clarified, “The public should please note that the tariff for Bands B, C, D, and E remains unchanged.”

Nigeria last reviewed electricity tariffs for Band A customers from N225/kWh to N206.8/kWh. This came 33 days after the NERC had raised the electricity tariff for Band A customers from N68/kWh to N225/kWh, representing about a 240 percent increase.

Africa’s most populous nation faces perennial power shortages that have contributed to years of weak growth.

Its electricity sector faces a myriad of problems including a failing grid, gas shortages, high debt and vandalism. The country has 12,500 megawatts of installed capacity but produces only about a quarter of that, leaving many Nigerians reliant on expensive diesel-powered generators.

BusinessDay’s findings showed the latest tariff hike is coming amid complaints from customers, including manufacturers as well as public and private institutions that their monthly electricity bills are grossly unaffordable.

On Monday, the Guild of Medical Directors of Nigeria raised the alarm that the hike in electricity tariff is choking private hospitals, with some of them closing shop.

Read also: DisCos revenue increase by 17% to N291 bn in Q1 2024

The guild disclosed that no fewer than eight private hospitals in Maiduguri, the Borno State capital, recently shut down over the high cost of electricity supply and insecurity.

“I can tell you now that we have hospitals that are using at least close to N25 million a month to generate power and that is tough for hospitals,” Raymond Kuti, national president of the Guild of Medical Directors, said.

Lilian Salami, vice chancellor of the University of Benin (UNIBEN), also recently lamented that the electricity tariff hike is taking a heavy toll on Nigerian universities, with most of the public tertiary institutions on the verge of bankruptcy.

Salami said the university has been painfully disconnected from the national grid because it could not afford to pay about N300 million monthly for electricity alone.

She said the development has led to a situation where electricity is being rationed for about four hours a day in the university campus in view of the high cost of diesel to power generators.

She observed that this was, however, not going down well with the students who hitherto had been enjoying electricity supply, sometimes 24 hours in a week.

“Right now, what we are going through is an electricity problem. Before now, the University of Benin could boast for at least 20 to 22 hours of light and that could run for weeks without a blink.

“But as soon as tariff was up, 300 per cent, we went from N80 million that was very difficult for us to pay per month to N280 million per month. That even came when the students were on vacation.”