July 16, 2024

DisCos confirm electricity tariff hike, give reasons

Oredola Adeola

The Association of Nigerian Electricity Distributors (ANED),  an association of the eleven electricity distribution companies(DisCos) in Nigeria, has confirmed that the silent electricity tariff increase only affected customers in Band  A and C, while customers under other bands are not affected.

Sunday Oduntan, Executive Director, Research and Advocacy at ANED, made this known in a live telecast on Lagos Television (LTV) Morning Delight, monitored by EnergyDay on Wednesday.

According to him the reasons for the increase include inflation, foreign exchange, underinvestment as well as rising operational cost affecting all players in the Nigerian Electricity Supply Industry(NESI).

EnergyDay’s check showed that there are five distinctive bands,  (A, B,C,D,E) reflecting the various service levels and minimum hours of power supply. Customers on “Band A”  enjoy a daily minimum supply of 20 hours and Band B with a minimum of 16 hours per day. Others are C, D  , and E with the minimum of 12, 8, and 4  hours of electricity per day

Oduntan said, “The electricity  Distribution Companies(DisCos), and electricity tariff are impacted by the macroeconomic challenges facing Nigeria.

“There is a need to invest more in capital expenditure for the daily improvement in power supply across the network, hence the increase.

“There is no way to separate the impact of inflation and foreign exchange from the general operations in the power sector since about 70 percent of the infrastructure used in the power sector is imported. into the country,” the ANED ED said.

He further noted that  the Nigerian Electricity Regulatory Commission(NERC) silently effect the increase in December 2022 affecting band A  and B, as part of a five-year Multi-Year Tariff Order that was done last year, effective January 1, 2022.

He said, “Prior to that, there were public consultations in line with the law all over the country carried out by the regulator. They are the ones that set the tariff,” he said.

“The notice was also issued NERC’s official website on May 4, 2022, showing the tariff that will commence from 2022 to 2026.”

According to him, the notice of the regulator was clear about the plant to effect the biannual tariff review in June and December 2022.

The ANED ED further blamed NERC for not making an official statement announcing the proposed tariff hike before going ahead, insisting that notice should have been given to the concerned customers prior to the increase.

Oduntan further revealed that an increase in bands A and B is meant to guarantee at least 20 hours of electricity or more, without a major increase on other banks since the hike does not affect them. .

“The hike is one of the measures required to address poor power supply to customers. The present tariff rate being paid by most customers is not a true reflection of market dynamics.

“We realised that NERC does not want to bring a huge hike in tariffs at once; it will be difficult for people to cope. What you pay now depends on how many hours of energy you get,” Oduntan disclosed.