Confusion over fresh hike in electricity tariff

There is confusion among electricity consumers and distribution companies over a fresh hike in electricity tariff.

On Tuesday, a report by a national daily emerged saying that the Nigerian Electricity Regulatory Commission (NERC) has approved over 50 per cent hike in electricity tariff payable by customers of the 11 distribution companies (Discos).

The report added that according to a revised Multi-Year Tariff Order (MYTO) signed by the new Chairman of NERC, Sanusi Garba, on December 30, 2020, and sighted Tuesday, the new tariff increase took effect on January 1, 2021, and supersedes the previous Order NERC/2028/2020.

Providing reasons for the latest tariff hike, the commission said it considered the 14.9 per cent inflation rate rise in November 2020 and foreign exchange of N379.4/$1 as of December 29, 2020.

Others were available generation capacity, the United States inflation rate of 1.22 per cent and the Capital Expenditure of the power firms before the tariff was raised.

Findings showed that the revised Service-Based Tariff saw an increase in the rates payable by the various classes of electricity users unlike the one of November 2020, that exempted low electricity consumers.

The commission also stated that the new tariff would be effective till June 2021 while a Cost Reflective Tariff would be activated from June to December 2021.

The commission had stated last month that it was carrying out a review for another tariff, hence the latest order announcing an increase in the rates payable by consumers.

In September last year, the commission raised electricity tariff but this was faced with stiff opposition by the organised labour, as the unions threatened to embark on a nationwide strike.

After a series of negotiations that tariff was reduced based on consumer classes and the hours of power supply received by an electricity user. (Nation)