After many months of delay and stiffer opposition, the new electricity tariff regime started on September 1, 2020. TOPE SUNDAY takes a look at the hue and cry over the development.
Since Monday, September 1, 2020, when the tariff of the electricity was hiked, Nigerians have been expressing their anger over the development. For them, the hike was ill-timed following the many weeks of lockdown occasioned by the dreadful coronavirus, while some argued that some Nigerians were not yet metered.
The twist
Going by the decision of the Senate, the expected electricity tariff hike is scheduled to take off in the first quarter of 2021. But the September, 2020, implementation date of the new tariff regime caught some Nigerians unawares.
The National Assembly had in the last week of June this year, after a meeting with the regulators Nigerian Electricity Regulatory Commission (NERC) and DisCos representatives, issued a statement stating that while the tariff increase was necessary, the timing was bad as Nigerians were still reeling from the negative effects of the Covid-19 pandemic.
“The agreement here is that there is not going to be an increase in the tariffs on July 1st. The speaker and I are going to take appropriate action and meet with the president. We are in agreement here that there is no question on the justification of the increase, but the time is simply not right and appropriate measures need to be put in place,” the statement read in part.
Why the increase?
According to report, the increase in price of electricity tariff is a follow-up to the charges set in 2015. The tariff increase would cater for revenue shortfalls in the sector. The order was issued to the 11 DisCos on December 31, 2019.
The Minister of Power, Saleh Mamman, was reported to have said the hike was inevitable due to the rising cost of electricity generation in Nigeria. According to him, improvement in electricity supply necessitated the need to increase electricity tariffs.
Mamma was quoted further as saying that electricity supply was being affected by cost-ineffective tariffs and that it was a drawback on the operation of the energy distributors. So, if the electricity supply was to improve, there’s a need for the procurement of needed equipment that would reflect on the electricity tariff.
NERC’s position
A week to the implementation to new electricity tariff regime in Nigeria, the chairman of the Nigerian Electricity Regulatory Commission (NERC), Prof. James A. Momoh, had read the riot act to the DisCos, saying that tariff reviews will only follow service-based principles.
Momoh said under the service-based principles, electricity distribution companies or DisCos will only be able to review tariff rates for customers when they consult with customers, commit to increasing the number of hours of supply per day and quality of service.
“In all cases poor and vulnerable Nigerians will not experience any increase. In line with these expectations, the Commission directed DisCos to engage with their customers on a service-based tariff structure.
“Under this structure, DisCos can only review tariffs for customers under the following conditions: that customers are consulted and communicated a guaranteed level of electricity service by the DisCos based on hours of supply customers are metered, and no estimated billing through the strict enforcement of the capping regulation.
“This means that unmetered customers will not experience any cost increase beyond what is chargeable to metered customers in the same area.
“Even under the above conditions, there will be no change in tariff for the most vulnerable as tariffs for those consuming 50KW or less remains frozen. Customers receiving less than 12 hours of supply will also not experience any change in tariffs,” Momoh said.
DisCos explain action
But the management of Abuja Electricity Distribution Company (AEDC), while announcing the commencement of the implementation of new Service Reflective Tariff (SRT) plan in its franchise, said it is a NERC’s mandated tariff structure whereby an upward increment in tariffs will result in substantially longer hours of power supply, good quality voltage profile, swifter response to faults clearing and provision of pre-paid meters.
AEDC, in a statement issued by its general manager, corporate communications, Mr. Oyebode Ogundipe, in Abuja, said: “The Service Reflective Tariff (SRT) plan is a NERC mandated tariff structure whereby an upward increment in tariffs will result in substantially longer hours of power supply, good quality voltage profile, swifter response to faults clearing and provision of pre-paid meters.
“The new tariff design proposes an upwardly adjusted tariff for customers who are not averse to paying more to enjoy longer hours of supply, stranded voltage profile and faster fault clearance timelines.
“While we keep working at ensuring all classes of customers enjoy improved supply, customers who enjoy less than 12 hours of supply will not be affected by the new tariff plan. Hours of supply to this class of customers will also not be adversely affected by the implementation plan.”
Nigerians react
However, the new electricity tariff regime did not go down with some Nigerians, who viewed that it would affect them negatively.
According to a resident of Jahi 2, Abuja, Ms. Ngozi Anthony, a stylist, the increment in the electricity tariff would affect her business, saying: “This increase is not good for our business since Covid-19 period, businesses are slow.”
Also, a barber, Mr. Okesola Samuel, said it would be difficult to ascertain the people receiving less than 12 hours power supply as stated in the tariff.
“How will DisCos know people receiving less than 12 hours of light, all we want is for government to assist us to reverse the increase in tariff as we are still battling with our losses due to the COVID 19 pandemic,’’ he said.
For a Twitter User, Ethan@
abraham0483, said the new tariff implementation structure is confusing and accused AEDC of not supplying for 12 hours in a day.
“What is the meaning of all this again? Is the current tariff we are on, not service reflective tariff? I stay at Lugbe (Abuja); it (tariff) was increased from N4500 to N5500. I hope you are not thinking of an increase again, because our supply isn’t up to 12hrs a day,” Ethan said.
Another Twitter user, Abdul MET @Ambassador_MET, asked if his money would be refunded if power supply to his house drops below 12 hours in a day, saying that the new regime is complicated.
“If my power supply drops below 12hrs a day on some days in a month, will I get a refund for the rate differential for those days. Sounds very complicated,” he said.
Raising the poser on how electricity supply would be calculated, a Twitter user, Mimi4christ, @jaymimi, said: “Hello, our light comes only in the night for 3 hours max and is gone. For the past 48 hours now, we only have 4 hours light, so how do you calculate the light we consume, when we do not see the power supply when necessary to use, it only comes in the night when not in use Kuje.”
However, Twitter user, Jenrola Ola @OlaniranJenrola, alleged that some of the DisCos had increased their tariffs before NERC’s approval and asked them to make refunds to their customers.
“You have already increased your tariff to N49.88 per kwh since over 4 weeks ago before the NERC approval. The approved tariff is N42. 73 from N21.30 per kwh. Kindly refund the excess charges to your customers. We are not happy with this increase before the approval,” he said.
