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HomePlanned September tariff increment amid dismal service-based-tariff performance shelved...

Planned September tariff increment amid dismal service-based-tariff performance shelved as NERC backs down, ECR stays

The Nigerian Electricity Regulatory Commission (NERC), under the Service Based Tariff (SBT) programme, had designed an incremental tariff with an upward review slated for September 1, 2021. The increment, expected to come into effect next Wednesday, may have been suspended

The Nigerian Electricity Regulatory Commission (NERC), under the Service Based Tariff (SBT) programme, had designed an incremental tariff with an upward review slated for September 1, 2021. The increment, expected to come into effect next Wednesday, may have been suspended. However the eligible customer regulation (ECR), which enables customers who use over 2MWh/h to get electricity directly from generating companies by-passing the traditional electricity market route, stays on.

The SBT came into force last year, increasing the cost of electricity by over 50 per cent, as government moved to halt subsidy in the electricity sector and allow the Nigerian Electricity Supply Industry (NESI) generate enough funds to finance the bed-ridden market.

The SBT may have succeeded in improving revenue collection in the sector by above N260b, but to the detriment of the masses. Improvement in electricity supply remains dismal, with perpetual outages and collapse of transmission and distribution infrastructure.

A document from the Eko Electricity Distribution Company published by the Guardian newspaper, and dated August 25, 2021, with reference number 023/EKEDP/GMCLR/0025/2021 showed that the tariff would increase from N42.44 to 58.94 depending on the class, with effect from September 1, 2021 The new tariff is expected to be in place till December before further increment takes place in January next year. Across the band, the increase remained N2 from the tariff paid between July and August. 

Shortly after the statement went public, a top government official stated that the statement was issued in error, while the Managing Director of Eko DisCo, Adeoye Fadeyibi denied that the statement came from the company. 

“Our attention has been drawn to news making the rounds in the media from unsubstantiated sources of a planned adjustment in electricity tariffs. Eko Electricity Distribution Plc would like to inform the general public to disregard all such reports not emanating from the management or the company’s website – www.ekedp.com,” he wrote a statement.

 “We were supposed to start implementation in July, but it was suspended till September,” the source said. Similarly, NERC yesterday, said the Eligible Customer Regulation (ECR) has not been suspended and at no time had the commission issued a directive for discontinuation of service to any customer. 

Indications had emerged that NERC earlier this month, halted the policy, throwing up series of criticism as investment made in the section of the industry remained in limbo.

Under the ECR, customers using over two megawatts per hour (MWh/h), who have the NERC approval can get their electricity from the Generation Companies (GenCos), rather than through the traditional electricity market route, which involved the entire electricity value chain: GenCos, Nigerian Bulk Electricity Trading PLC (NBET), Transmission Company of Nigeria (TCN) and the Distribution Companies (DisCos).

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