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Suspending new power tariff will kill sector – NERC

By on June 18, 2014

The Chairman, Nigerian Electricity Regulatory Commission, Dr. Sam Amadi, has raised the alarm that any attempt made to suspend the planned review of the electricity tariff regime will result in the death of the power sector.

Amadi told our correspondent in a telephone interview on Monday that prior to now, the tariff had been spelt out in a plan covering 2012 to 2015, which was published by the commission.

He stressed that from the plan, there were stipulated tariffs for every year tied to three major milestones – quantity of power supply, foreign exchange and inflation trends.

On the call by the organised labour and other stakeholders to halt the planned increase in the electricity tariff, Amadi said it was unnecessary as the people canvassing the suspension had no good understanding of the tariff system.

“If we suspend the review of the tariff, we will only be killing the sector. Those that are saying we should suspend the review lack the capacity to understand the way the tariff system works,” he added.

The NERC boss, however, maintained that the periodic review of electricity tariff was based on projections arrived at using a formula that took into consideration relevant parameters, adding that the commission was not imposing tariff on consumers, but was only being guided by the projection.

Explaining the reason behind the planned tariff increment for most electricity distribution companies, he said the commission, from available statistics, had observed that the quantity of power supply went up.

“At this juncture, if we decide to suspend the planned review, no investor will want to come and invest in the sector. We know people are suffering and we are not reviewing tariff because there is supply. We are doing this because we want to create supply,” Amadi explained.

According to him, the non-availability of gas to the power generation companies has continued to pose huge threat to operations, while also affecting projections.

He said the tariff of the R1 customers who consume between zero and 50kWh of electricity monthly would not be reviewed.

But for the R2 customers, under which most households fall, NERC had announced that the cost would increase by N1 per kilowatt. It also said the electricity fixed charge, which was to rise to N1,500 from June 1 in the Multi Year Tariff Order for 2014, would remain at N750 for some customers.

On Tuesday last week, officials of the Federal Government and the organised labour had engaged in a heated argument over the recent increase in electricity tariff.

The Federal Government had last month announced a review in the tariff with marginal increase in the energy charge effective June 1, 2014.

The development had been condemned by various labour unions.

 

 

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