Monday, 29 June 2020 05:34

Electricity companies accuse FG of deceiving Nigerians about tariff increase

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Electricity distribution companies in Nigeria (DisCos) have accused federal government, especially Nigerian Electricity Regulatory Commission (NERC), of trying to dissociate itself from the July 1 increase in electricity tariff.

DisCos said the increase in tariff and the commencement date were both approved by NERC.

The tariff increase, initially scheduled to commence on April 1, was postponed.

A review of the new tariffs showed price increases would have ranged from 60 per cent in places like Ikeja, to about 73 per cent in Abuja, and about 78 per cent in Enugu.

Many Nigerians have condemned the tariff increase, saying the electricity situation should get better first before an increase. Proponents, however, say the electricity situation cannot get better unless consumers pay appropriate prices for electricity and allow investors to make enough money to reinvest in their infrastructure.

In their statement on Sunday,  DisCos decried the alleged attempt by NERC to distance itself from the July 1 commencement of increase in electricity tariff.

Their stance was made known in a statement issued by Mr Sunday Oduntan, Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED) in Abuja on Sunday.

ANED is a group that represents interests of the DisCos, many of whom are reluctant to tackle the government individually. The government, including power ministers, has, however, refused to join issues with ANED; saying it has no dealings with the association.

“We are in a regulated sector. We cannot take decision about a very critical aspect of the sector like tariff without a nod from the regulator (NERC).

“However, what has happened in recent days is that our regulator is warning us not to mention their name or the Federal Government in any of our communication about the tariff increase with our customers. This is certainly very unfair.”

“Many stakeholders have expressed their concern at the unusual silence of our regulator, NERC on the upcoming increase and it looks like a unilateral decision by the DisCos.

“We will like to inform Nigerians that tariff review (upward or downwards) is the primary responsibility of NERC as our regulator,” he said.

Oduntan said DisCos were required to submit their proposals, adding that NERC had the final say.

He said DisCos were surprised to receive a letter from NERC warning them not to mention their name or that of the federal government in any public communications on tariffs.

“While it is our obligation to communicate the increase, it is also important for customers to know that it is following standard processes of tariff adjustments in the sector with approvals from NERC and Federal Government.

“As DisCos, we believe in the rule of law. We will only carry out lawful approval and instructions by our regulator.

“The proposed increase and the timing of the increase in tariffs was done by NERC. It is their statutory responsibility. DisCos alone cannot fix and approve electricity tariffs,” he said.

Oduntan said that DisCos were sensitive to the feelings and yearnings of their customers during this period of Covid-19.

He said that to demonstrate their sensitivity, the DisCos, in conjunction with the National Assembly, suggested a two-month free electricity supply for residential customers.

He said the proposal was not approved by federal government due to paucity of funds occasioned by the reduction of national income from the sale of crude oil.

Speaking on the tariff increase,  Oduntan said: “The fact that the action is deliberately made to look unilateral is capable of creating public resistance, effectively setting DisCos up to fail.”

“All DisCos had started communicating the new tariff regime, set to take effect from July 1, 2020, since last week.

“The communication is geared at enlightening customers about the details of the service based tariff increase to ensure customers were fully aware about how it pertained to them and the supply band they fall under.

“The truth is that we are the public facing arm of the sector, but what we collect is shared by everybody, including NERC.

“Our interest is in the nurturing of a commercially viable power sector. Political considerations and bickering will certainly not take us there.”

Reacting to the allegation, Mr Mike Faloseyi, Assistant General Manager, Government and External Industry Relations, NERC, refused to join issues with ANED.

He said NERC does not carry out its regulatory activities on pages of newspapers.

“They are Nigerians, they are free to comment and they have made their comment,” he said.