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New Electricity Tariff Regime Begins February 1

The Nigerian Electricity Regulatory Commission (NERC) has said that the new electricity tariff, the Multi-Year Tariff Order (MYTO) 2015, will take off on February 1, 2016.

The Commission noted that there are inbuilt consumer protection mechanisms and incentives for improved service delivery by the distribution companies and fair return on investment in the new tariff order.

Consequently, the Commission has reiterated its directive to the distribution companies (DISCOs) to abide by its order not to connect new customers without first providing them with meters.

In a statement made available to LEADERSHIP by NERC yesterday, the acting Head of the Commission, Dr Anthony Akah, said the removal of fixed charge under the new tariff regime “was in response to electricity consumers’ complaints and a measure to ensure electricity distribution companies improve on service delivery as their income is dependent on the quantity of electricity used by their customers.”

Akah said that the Commission will continue to engage stakeholders including members of the National Assembly to address their concerns on the new tariff regime, adding that “NERC holds the National Assembly in high esteem and we are sure that both institutions are working to ensure that the national and consumer interests are protected.”

The Commission, in implementing this cost reflective tariff will effectively monitor and enforce all service delivery agreements in the new tariff order, Akah said in the statement.

The new tariff order aside from eliminating fixed charge has a robust mechanism to ensure that electricity distribution companies fully meter their consumers and eliminate “crazy” billing within one year.

This is as the Commission explained that it has the capacity to continue to carry out its mandate until the reconstitution of new Commissioners following the expiration of the tenure of the former Commissioners and Chairman, Dr. Sam Amadi on December 22, 2015.

In the new tariff design, residential customer category (R2), in the Federal Capital Territory (FCT), Niger, Nassarawa and Kogi States for instance, which fall under the Abuja Electricity Distribution Company (AEDC) franchise, who previously paid N14 per kilowatt hour, will now pay N23.60 per kilowatt hour.

Similarly, residential customers in Eko and Ikeja electricity distribution areas will be getting N10 and N8 increase respectively in their energy charges. The same situation goes for residential customers in Kaduna and Benin electricity areas who will see an increase of N11.05 and N9.26 respectively in their energy charges.

According to Akah, the Commission as currently staffed, is well positioned to carry out its responsibilities especially as it commences the implementation of the new tariff pending the appointment of a new set of commissioners.

Meanwhile, in a renewed effort to re-energize local manufacturing of meters, the Minister of Power, Works and Housing, Babatunde Raji Fashola, has met with local electricity meter manufacturers with a view to re-focus attention on the need to rapidly roll-out meters in order to ensure that Discos charge electricity consumers only for energy they consume.

In view of the estimated over 3 million unmetered electricity customers nationwide, the minister said government’s policy is to bridge the gap as quickly as possible with maximum impact on local manufacturing and employment potentials fully harnessed.

In order to address issues of concern to government and local meter manufacturers, the forum advocated the need for distribution companies to more aggressively patronise locally manufactured meters.

Listing their challenges, representative of the local meter manufacturers, Engr. Kola Balogun, stated that access to credits, and cost of credit is a major impediment to the growth of their production capacity in meeting present and future demand for meters.

They however, assured the minister of their readiness to support the rapid roll-out of meters and supported governments plan to put in place clearer incentives for local production as opposed to importation of meters.

 

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