May 25, 2024

Federal Government backs controversial electricity tariff increase by Discos


Bunmi Martins

The Federal Government has confirmed its approval of  electricity tariff by Electricity Distribution Companies (Discos). This confirmation is coming after three days of complete electricity black out, leading to public outcry by electricity consumers across the country.

Tariff increase has been recurring over the last two years and it is sometimes referred to as tariff adjustment by the Discos in order to sidetrack regulatory sanctions.

The Minister of Power, Abubakar Aliu who confirmed the latest government approval explained the circumstances which informed the decision of the government.

He said  “ the more reason we are facing the situation now is as a result of the shortage of gas and some of the generators have to go for maintenance. It is scheduled maintenance and it is supposed to be a scheduled outage but we had not envisaged that we will have issues around vandalism of pipelines which the NNPC has addressed.

“It is a combination of many factors. that  has compounded the problem we are having on the grid. We have recovered the grid now. The grid is back and we are trying to get more megawatts to push on the grid.

“We have set up small committees all geared towards getting more megawatts to put on the grid. Basically, the problem around gas. You need to have a gas contract between generating companies and gas suppliers; some are in the form of contracts, some are not. We are looking into this and have proffered some solutions.”

Chairman , NERC, Sanusi Garba provided clarity on the question of arbitrary tariff increase which was the central theme of concern by consumers. “ Tariff increase will be enforced at intervals of  every six months , going forward’. This according to the NERC Chairman is to accommodate for inflationary trend, gas pricing and other factors associated with the cost of producing electricity.

The Minister of Power had earlier confirmed that the country’s wheeling capacity to distribute electricity is limited to 5000Mw although the country’s generating capacity is put at 13,000Mw.   This is to say that 7000Mw capacity is idle. We have the Niger delta power Plant and the federal government has invested in 10 new plants out of which 8 of them are functioning but generally, they are all constrained  because they do not have access to gas feed-stock..

While industry battles over a lingering debt of N1.29trn, the government on its part has withdrawn its N30bn monthly subsidy, a situation that could expose consumers to bear these shortfalls through tariff increases.

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