FG reviews electricity tariffs for power distribution companies, freezes hike till April

Nigerian Electricity Regulatory Commission (NERC) has published a reviewed power tariff for December 2019 with no hike for customers of the 11 Distribution Companies (DisCos) until April 2020.

NERC, in the published December 2019 Minor Review of the Multi Year Tariff Order (MYTO) 2015 and the Minimum Remittance Order (MRO) for 2020, gave a caveat on the frozen tariff hike.

“The Federal Government’s updated Power Sector Recovery Programme (PSPRP) does not envisage an immediate increase in end-users tariffs until 1st April 2020 and a transition to full cost reflectivity by end of 2021.”

To bridge this gap since customers won’t pay the new tariff till April, NERC, in the Order, dated December 31, 2019 and signed by NERC Chairman, Mr James Momoh and Commissioner, Legal, Licencing and Compliance, Mr Dafe Akpeneye, said: “In the interim, FG is committed to fund the revenue gap between the cost reflective tariff and the actual tariff NERC allows customers to pay.”

NERC said the review considered changes in macroeconomic indices like inflation at 11.3%, exchange rate at N309.9 to a dollar, and gas price at $3.30 per standard cubic feet (scuf).

These are the Orders for the 11 DisCos:

For Abuja DisCo, customers ought to pay average N54.3 per kilowatt hour (KWH) as cost reflective tariff effective January 1, 2020.

However, NERC said it should continue collecting N32.7.

Hence, Residential 2 (R2) customers’ bill remains at N24.30/kwh till April when the PRSP stipulates a hike. But it must remit 42% as payment for monthly bulk energy to the Nigerian Bulk Electricity Trading Plc (NBET).

Benin DisCo customers will pay average N32.5/kwh instead of the new N56.4 cost reflective amount. Residential customers will continue to pay N31.26/kwh and it must remit 35.7% for bulk energy henceforth.

In Lagos, Ikeja DisCo customers ought to pay N44.6/kwh but are allowed to pay N27.3/kwh for now by NERC. While its Residential customers continue to pay N21.30/kwh, the DisCo must remit 49% bulk energy payment.

For Eko DisCo, customers will pay N28.3/kwh average instead of N47.0/kwh cost reflective amount. Residential customers will continue to pay N24/kwh and it must remit 43% bulk energy settlement to NBET.

Kano DisCo, customers should pay N52.7/kwh average but are allowed to pay N30.1/kwh. DisCos collects N22.50/kwh from Residential customers now and must pay 38% of its monthly bulk energy bill.

Enugu DisCo averagely collects N35.3/kwh from customers instead of N54.4/kwh. Residential customers pay N30.93/kwh and the DisCo must pay 42% monthly bulk energy invoice to NBET.

For Yola DisCo, customers will pay N57.4/kwh in future but are presently allowed to pay N26.8/kwh. It bills Residential customers N23.25/kwh and it must pay 12% of its monthly energy invoice or face sanctions.

 

Daily Trust

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