…to probe N2trn subsidy, debts in the power sector
The Nigerian Senate has called on the federal government to step down a proposed plan to increase electricity tariff, noting that such action will exacerbate the hardship already endured by Nigerians.
This followed a motion titled “Planned Increase in the Electricity Tariff and Arbitrary Billing of Unmetered Customers by Distribution Companies (DISCOS)”, sponsored by Aminu Abbas, the Senator representing Adamawa Central and co-sponsored by 10 other lawmakers during plenary on Wednesday.
Abbas, leading the debate, expressed dismay that the plan to increase electricity tariff by the relevant statutory authority is in gross disregard of increased economic challenges with attendant widespread poverty and high cost of living.
Bayo Adelabu, the minister of power, while briefing journalists last week said Nigeria cannot continue to subsidise electricity citing huge indebtedness in the power sector to the tune of currently indebted to the tune of 1.3 trillion naira to generating companies (GenCos) and $1.3 billion owed gas companies.
The minister also stated that only N450 billion was budgeted for subsidy in 2024, but the ministry needs over N2 trillion for subsidy.
Abbas regretted that the same electricity businesses were collecting money from customers for services not rendered.
He decried the issue of arbitrary energy charges on unmetered customers has become worrisome. “The multiple sanctions declared to be imposed by NERC against DISCOs for failing to comply with the scrapping of estimated bills for unmetered customers which include credit adjustments to overbilled unmetered customers for the period January – September 2023 by the March 2024 billing cycle, publication of the list of credit adjustment beneficiaries in two national dailies, and deduction of N10. 5 billion from the annual allowed revenues of the eleven DISCOs during the next tariff review seemed to have been in futility given the continued violations by DISCOs”, he said.
Lawmakers, while debating the motion argued that an attempt by the federal government to raise tariff hike and removal of subsidy is ill-timed, stating that the government should rather focus on electricity generation and distribution.
Contributing to the debate, Aminu Tambuwal, Senate representing Sokoto South Senatorial district said it was abnormal for the government to consider hiking electricity tariff in the face of hardship, stressing that such action should not even be contemplated in the first place.
Orji Kalu, the Senator representing Abia North Senatorial district noted that even advanced economies subsidize electricity. He said the focus of government should be on distribution. “Why should people be paying for what they did not use? Our focus should be on transmission and distribution”, he said.
The Senate consequently mandated its Committee on Power investigate the over 2 trillion naira subsidy requirements as stated by the Minister of Power, and his statement of the N1.3 trillion the ministry owes generating companies and $1.3 billion owed to gas companies.
The Committee is also to investigate the role of the Ministry of Power, NERC and Ziglaks company on their roles in the failed agreement to provide prepaid meters and ensure Nigeria is not shortchanged; Find out the truth of the matter with regards to the issue of Federal Government directive and release of funds for mass pre-paid metering and report findings to the senate;
Enforce and ensure the judicious utilisation of the 10.5 billion naira penalty imposed on DISCOs; Investigate the operations of DISCOs to ascertain the current status of metering and their extent of compliance with relevant legal and regulatory frameworks in service delivery; and Direct NERC to ensure the implementation of Energy caps by all DISCOS to unmetered customers in the country.
The Committee is to submit a comprehensive report for further legislative action within three weeks.
