NERC Orders Discos To Suspend Electricity Increase

NERC Orders Discos To Suspend Electricity Increase

The Nigerian Electricity Regulatory Commission (NERC) yesterday, ordered the 11 electricity distribution companies (Discos) to suspend forthwith the planned electricity tariff increase scheduled to take effect today.

The directive to the Discos dated March 31, 2020 was signed by the NERC Chairman, Mr. James Momoh, and Commissioner Legal, Licensing and Compliance, Dafe Akpeneye. NERC had disclosed in its December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 that the order to increase electricity tariff effective from April 1, 2020, was issued to reflect the impact of changes in the minor review variables in the determination of cost-reflective tariffs and relevant tariff and market shortfalls for 2019 and 2020.

Read Also: NERC Probes Discos’ Utilisation Of FG’s Intervention Funds

But in a dramatic swift, NERC argued that the wide metering gap in Nigeria Electricity Supply Industry(NESI), currently at about 60 per cent, was a major impediment to both an immediate tariff review and revenue protection for Discos. The Commission further noted that the public hearings held to consider the applications in compliance with sections 45 and 47 of the Electric Power Sector Reform Act 2004 (“EPSRA”), Business Rules of the Commission and the Tariff Review Regulations was not in support of the tariff increase.

It added that End-use customers of the 11 Discos are willing to pay appropriate rates for services rendered by the Discos, but this willingness is conditioned on guaranteed hours of service, quality of power and adequate metering; and not on improvement promises (that were never implemented) that characterised previous reviews. ‘‘The public hearings to consider the applications filed by DisCos were held at different locations within the franchise areas of the respective DisCos from 25 March to 9 April 2020.  A public hearing was further held on 11 March 2020 at the Commission’s headquarters in Abuja for the consideration of the application filed by the Transmission Company of Nigeria Plc (“TCN”) on the review of rates payable to generation companies that provide the Ancillary Service of Spinning Reserve.’’  It stated that the consideration of customer complaints was not placed on the agenda as the hearings were for a defined purpose; the Commission however observed that end-use customers used the opportunity to provide feedback on their dissatisfaction with the quality of service provided by Discos and bitter feedback was also provided on the practice of estimated (and sometimes arbitrary) billing.



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