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FG approves new electricity tariff increase from Sept. 1

*Poor Nigerians not affected – NERC

 By Obas Esiedesa

The Federal Government has approved a new service based tariff increase for the electricity sector.

The new tariff regime is expected to take-off on September 1 after it was shifted twice earlier in the year.

The government also approved a one-year waivers on import duty for electricity meters to enable electricity distribution companies provide meters to customers.

However, a statement by the Nigeria Electricity Regulatory Commission (NERC) on Wednesday, explained that the tariff increase will not affect “poor Nigerians”.

NERC Chairman, Prof. James. A. Momoh in the statement explained that “tariff reviews going forward will only follow service-based principles. Under these service-based principles DisCos will only be able to review tariff rates for customers when they consult with customers, commit to increasing the number of hours of supply per day and quality of service”.

Momoh added: “In all cases poor and vulnerable Nigerians will not experience any increase. In line with these expectations, DisCos are directed to engage with their customers on a Service Based Tariff structure. Under the Service Based Tariff Structure, DisCos can only review tariffs for customers under the following conditions:

“(1) Customers are consulted and communicated a guaranteed level of electricity service by the DISCOs based on hours of supply.

“(2) Customers are metered

“(3) No estimated billing through the strict enforcement of the capping regulation. This means that unmetered customers will not experience any cost increase beyond what is chargeable to metered customers in the same area”.

Momoh noted that “even under the above conditions, there will be no change in tariff for the most vulnerable as tariffs for those consuming 50KW or less remain frozen. Customers receiving less than 12 hours of supply will also not experience any change in tariffs”.

He said President Muhammady Buhari has directed that “there should be a nationwide mass metering program in an effort by the Federal Government to put a stop to estimated and arbitrary billing for electricity. He has also approved a waiver of the import levy on meters, so that those that do not have meters can be supplied as early as possible at reasonable costs”.

ExpressDay recalls that NERC had in January this announced that there would be an upward service based review of electricity tariffs across the country from April 1.

The decision was however suspended following the outbreak of the Coronavirus in the country.

It was further suspended in June following the intervention of the National Assembly which persuaded the DisCos to defer the plan till the first quarter of 2021 because of the pandemic on energy consumers.

The approval on import duty waiver followed the request by the Minister of Finance, Mrs. Zainab Ahmed, to fast-track the deployment of prepaid meters under the Meter Asset Providers (MAP) scheme.

Special Adviser to the Minister on Media and Communications, Yunusa Abdullahi in a statement in Abuja explained that the application of the duty on imported meters has created a significant challenge to the smooth implementation of MAP scheme.

According to the statement, “The 35 per cent levy was imposed on the recommendation of the Federal Ministry of Industry, Trade and Investment, to encourage local production, as well as protect investments in the local assembly of electricity meters.

“An important feature of the MAP regulation is a gradual up scaling of the patronage of local manufacturers of electricity meters with an initial minimum local content of 30 percent with the potential of significant job creation in the area of meter assembly, installation and maintenance”.

Written by ExpressDay


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