Reps Ask NERC, DISCOs to revert to old tariff

The House of Representatives has asked the Nigerian Electricity Regulatory Commission (NERC) and Electricity Distribution Companies (DISCOs) to revert to the old electricity tariff.

The resolution was contained in a report by the ad hoc committee to investigate the recent electricity tariff hike for customers in the Band A category.

The report, presented by the Chairman of the joint committee, Victor Nwokolo, made three recommendations to the House, which the Committee of the Whole adopted.

Hike in electricity tariff

In April, the Nigerian government announced a hike in the electricity tariff, affecting customers in the Band A category, who represent 17 per cent of the customers and consume 40 per cent of the electricity output.

The policy allowed DISCOs to raise electricity prices to ₦225 ($0.15) per kilowatt-hour from ₦68 in return for guaranteeing 20 hours of electricity supply per day.

The government explained that the decision to implement the tariff increase was to improve liquidity in the downstream power sector, as it had become difficult to sustain the subsidy in the sector.

“Now, if you add the ₦2 trillion legacy debt owed to gas companies and the ₦1.3 trillion owed to GenCos, we have an inherited debt of over ₦3 trillion in this sector. How will the sector move forward? Nigerians deserve the right to know this,” the Minister of Power, Bayo Adelabu, said in February.

The hike was condemned by customers and organised labour groups, including the Nigerian Labour Congress (NLC), which called for the reversal of the policy.

However, the government proceeded with the hike and even upgraded more customers into the Band A category.

On 30 April, the House urged NERC to suspend the tariff hike pending the conclusion of its investigation but the government went ahead with the implementation.

Recommendations

Presenting the report’s synopsis, Mr Nwokolo said the committee made three recommendations, one of which was to revert to the status quo and implement the hike in phases.

The committee also asked the House for the mandate to hire independent contractors to investigate and determine the ideal tariff.

“The Nigerian Electricity Regulatory Commission should revert to the status quo as was earlier contained in the original motion, and within 60 days, they should comply with section 116 (2b and 3b) of the Electricity Act.

“The joint committee should contract independent experts to carry out a forensic investigation into what should be the actual cost of electricity tariffs.

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“All electricity distribution companies should revert to the old tariff pending the resolution of the matter by the House.

“The conclusion of the House is that the implementation of the increment should be done in phases over some time, not as they have just done,” he said.

The Committee of the Whole adopted the three recommendations without any objection.