The Nigerian Electricity Regulatory Commission (NERC) will today begin consultations with power consumers nationwide for their views on the planned tariff hike, which is expected to start in April this year.
NERC had recently called for contributions from members of the public on their views about the proposed hike which it tagged, extraordinary review of tariff applications from the 11 Distribution Companies (DisCos) and the Transmission Company of Nigeria (TCN).
The review, when implemented by could, would see the rates rising by an average of 66 per cent from April 2020 and will further increase from January 2021. According to the latest details of the consultations contained in a notice published by NERC last weekend, the meetings will hold across 12 locations with each for the 11 DisCos and TCN.
For today, Tuesday, NERC is starting with Eko and Kaduna DisCos where it will customers in Lagos and Kaduna.
Customers and stakeholders of Abuja and Ikeja DisCos will be next on Wednesday as NERC officials meets them in Abuja and Lagos. It will take the consultations to Ibadan and Bauchi on February 28 for consumers to deliberate on the planned tariff hike across the franchise areas of Ibadan and Jos DisCos.
That of Benin and Port Harcourt DisCos will hold in Asaba and Calabar on March 2nd, while NERC and consumers will slug it out on the tariff hike in Yola on March 5 as it relates to the tariff of Yola DisCo.
NERC will hold Enugu DisCo’s consultation in Owerri on March 6; Kano DisCo on March 9, while stakeholders and DisCos who are the direct customers of TCN will meet in Abuja on March 11 to review TCN tariff. NERC said it did not initiate the current plan for a tariff hike but that it was considering applications for an extraordinary tariff review received from the DisCos and TCN.
The Commission by law, reviews the Multi Year Tariff Order (MYTO) twice a year and could consider a major review once in five years.
However, it can honour a review anytime the market participants including DisCos and TCN call for an extraordinary review. The new tariff according to NERC is based on the Performance Improvement Plans (PIPs) of the DisCos covering 2020 to 2024 to upgrade their capital expenditure allowances rather than the existing one.
“The justifications advanced included the need to embark on a more aggressive loss reduction, improvement of customer service and the deployment of state-of-the-art-technology to improve delivery,” NERC said. For TCN, NERC said it requested that its annual revenue requirement is reviewed because of its new and significant investments in infrastructure currently not captured in its Regulatory Asset Base (RAB).
“The current stakeholder Consultation process is focusing on a review of the rates for the provision of spinning reserves by GenCo,” NERC added.