I have no doubt this is good news for some, but for me, it makes no difference because even with the tariff reduction, there's still no stable power. This month the electricity company has really ripped me off. You pay bills and yet no power supply. Punch report below:
The Federal Government on Tuesday announced a reduction in
electricity tariffs by 50 per cent.
It explained that the reduction which came barely two months
after it cut the pump price of petrol by N10,
followed a series of complaints by electricity consumers.
The government through the Nigerian Electricity Regulatory
Commission added that it took the decision after it removed the collection loss
component of the Multi Year Tariff Order 2.1 of the affected Discos.
NERC Chairman, Sam
Amadi, said the addition of the Aggregate Technical, Commercial and Collection
losses to the reviewed tariff that was implemented on January 1, 2015 was
responsible for the skyrocketed tariff.
He said although the increment in residential tariff was
pending till June 2015, the total removal of the collection loss applied to all
consumer categories, including industrial and commercial consumers.
Energy charges vary from one Disco to another. In Abuja for
instance, residential consumers, based on the MYTO 2.1, pay N4 per kilowatt
hour, while the amount charged commercial customers, depending on their
respective category, range from N23.32 to N37.68 per KWH.
Fixed charges for most residential consumers is between N650
and N750 while energy charge has an average of about N4 for every KWH.
With the new directive, it therefore means that the energy
charge, which forms the larger part of the tariff paid by customers when
computed by Discos, will be reduced by half.
Nigeria has 11 Discos
that distribute power to
consumers.
Amadi said the commission listened to consumers and took
full account of the impact of high tariff paid by consumers and the economy and therefore reviewed the basis of
the MYTO 2.1 assumptions.
He explained that after the review, it was agreed that it
was inappropriate to transfer the collection losses that were controllable by
Discos to consumers.
The NERC chief said, “It is the responsibility of the Discos
to collect their revenue from their customers. Failure to do so should not be a
penalty to customers who pay their bills. It is clear that removing the
collection losses will lead to lower tariffs for consumers.
“The removal of collection losses from customer tariff has
reduced tariff by more than 50 per cent in some places. Please note that the
reduction does not affect the Central Bank of Nigeria facility and its
repayment.”
Since January 1, 2015 when NERC approved the MYTO 2.1, there
had been several complaints against the increase in tariff of different
consumer classes.
Industrial and commercial consumers under the auspices of
the Manufacturers Association of Nigeria petitioned the commission asking for a
review of the MYTO 2.1 and requested drastic reduction of their tariff.
MAN had stated that such astronomical increase in tariff was
capable of killing their business and leading to massive job losses.
The association also threatened to shut down its factories
if NERC failed to revert to the rate that was obtainable before the announcement
of the “astronomical increase” which
took effect on January 1, 2015.
Amadi explained that the Electric Power Sector Reform Act
and the Business Rules of the commission mandated NERC to review its decision
if a complaint by an interested party has a merit.
He added that pursuant to these rules, the commission
organised public hearing and received evidence from consumer classes on the
affordability of the new tariff.
He said, “The commission also invited the chief executive
officers of the Discos to the hearing to respond to the case of the consumer
groups. Furthermore, the commission reviewed the technical and financial
assumption of MYTO 2.1.
“The review shows that the major underlying cause of the
skyrocketing increase in the tariff is the huge ATC&C losses, which are
passed through to consumers. In some Discos, ATC&C losses increased tariff
by as much as 80 to 103 per cent.
“Therefore, on Monday, March 9, 2015 the commission issued a
new order to the effect that henceforth collection loss, which is defined as
the ‘amount billed but not collected’, will not be automatically passed on to
consumers of electricity.
“Consequently, the collection loss for all Discos is set at
zero. It is now the responsibility of Discos to convince the regulator of any
exceptional circumstances for such loss to be passed to the consumers.”
The NERC boss added that the new direction came as part of
the commencement of the Transitional Electricity Market.
TEM is built on bilateral trading between parties and is
geared towards ensuring an efficient market where cost reflectivity will lead
to more affordable electric services for consumers.
Amadi further explained that as part of preparations for
TEM, NERC had issued a tariff review regulation that required the utilities to
consult with relevant consumer classes before presenting a tariff review
application to the commission for approval.
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