FG Orders NERC To Suspend Electricity Tariff Hike

The federal government yesterday directed the Nigerian Electricity Regulatory Commission (NERC) to suspend the tariff hike it approved recently.

The minister of Power, Engr Sale Mamman who handed down the directive said it was aimed at the paving way for a successful conclusion of the ongoing dialogue between the federal government and the labour unions.

The directive which was contained in a statement issued yesterday ordered NERC to ask all the distribution companies (DisCos) to revert to the tariffs that were applicable as at December 2020.

“To promote a constructive conclusion of the dialogue with the Labour Centres (through the Joint Ad-Hoc Committee), I have directed NERC to inform all DISCOs that they should revert to the tariffs that were applicable in December 2020 until the end of January 2021 (when the FGN/Labour committee work will be concluded).

“This will allow for the outcome of all resolutions from the Committee to be implemented together,” the minister noted.

NERC had issued an order stating that it had reviewed upward by a margin of N2.00 and N4.00 per KWhr respectively depending on the type of customer.

A revised Multi-Year Tariff Order (MYTO) signed by the new chairman of NERC, Engr. Sanusi Garba, on December 30, 2020, and sighted Tuesday indicated some percentage increase in the tariff  payable by customers of customers of Ibadan DisCo with effect from 1st January 2021, even as the commission said this latest order supersedes the previous Order NERC/2028/2020.

In the new Order NERC/225/2020, the commission said it considered the 14.9 per cent inflation rate rise in November 2020, foreign exchange of N379.4/$1 as of December 29, 2020, available generation capacity, US inflation rate of 1.22 per cent and the Capital Expenditure (CAPEX) of the power firms to raise the tariff.

The revised Service-Based Tariff (SBT) also saw an increase in the rates payable by all classes of electricity users unlike the one of November 2020, that exempted low power getters.

This is effective till June 2021 while a Cost Reflective Tariff (CRT) expected to raise the new cost higher will be activated from June to December 2021, the NERC Order revealed.

This latest order has sparked a lot of anger and criticism among consumers across the country as they saw the attempt as a calculated one to exploit Nigerians even as they groan under epileptic power supply. This followed reports in the media that the increment was over 50 per cent, forcing the commission to come out and deny approving 50 per cent increase in electricity tariff with effect from 1st January, 2020.

Recall that NERC had raised tariff for the DisCos in September but that drew outrages from customers and the organised labour, prompting the federal government to suspend it while parties dialogued.

By 1st November 2020, the suspended tariff was implemented after some discounts were given for customers who get 12 hours and above power supply daily. However, those with less than 12 hour supply did not get a tariff hike, according to the NERC order of November 2020.

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