Senators reject electricity tariff hike

Minister of Power, Adebayo Adelabu, has revealed that Nigeria would need an annual $10 million to revive the country’s moribund electricity generation, distribution and supply chain.

This is even as senators rejected the recent hike in electricity tariff, describing it as unacceptable and anti-people, reports Daily Sun.

The Minister said the sum must be spread across the period to end the liquidity challenge in the sector.

The Minister’s disclosure was made at a one day investigative hearing on halting the increase in electricity tariff by the electricity distribution companies amid the economic situation in Nigeria, organised by the Senate Committee on Power.

Lawmakers decried the experiences of Nigerians on electricity supply over the years, despite the unbundling of the sector.

Enyinnaya Abaribe, who is the Chairman of the Committee said what Nigerians wanted was a solution to the issues and ways to ensure liquidity in the sector.

He also decried the non appearance of a company, ZIGLAKS, over the failed agreement to provide prepaid meters for Nigerians.

He alleged that the company had received N32 billion in 20 years to meter Nigerian electricity consumers.

Senator Lola Ashiru said Nigerians were paying for inefficiency of power sector operators. Ashiru, who is vice chairman of the committee said there was a lot of inefficiency across the value chain of generation, transmission and distribution.

He said poor Nigerians must be protected, adding that there was a need to consider a reversal of the tariff increase.

Solomon Lalong said there was no consultation before the increase, adding that issues of palliative should have been discussed and provided before the tariff increase.

Adamu Aliero said due consultation was not made before the tariff increase.

He said the public was not at peace with the increase, saying that the increase was over 200 percent, hence, the need for a reversal of the tariff increase.

Stakeholders that made presentations at the investigative hearing included the Nigerian Electricity Regulatory Commission (NERC), Manufacturers Association of Nigeria (MAN), Association of Power Generation (Gencos), and Electricity Distribution Companies (DisCos) among others.

Undisturbed, the Minister insisted that, “for this sector to be revived, the government needs to spend nothing less than $10 billion annually in the next 10 years.

“This is because of the infrastructure requirement for the stability of the sector, but the government cannot afford that.

“So, we must make this sector attractive to investors and lenders. So, for us to attract investors and investment, we must make the sector attractive, and the only way it can be made attractive is that there must be commercial pricing.

“If the value is still at N66 and the government is not paying subsidy, the investors will not come. But, now that we have increased tariff for a Band, there are interest being shown by investors.”

He attributed the major challenge in the sector to the absence of liquidity, adding that the sector has been operating on a subsidised tariff regime, given the absence of a cost reflective tariff.

This is as he pointed out that subsidies had not been funded over the years as huge liabilities were owed to the GenCos and the gas companies.

Adelabu said the inability of the government to pay outstanding N2.9 trillion subsidy was due to limited resources, hence, the need to evolve measures to sustain the sector.

He appealed to the lawmakers to support the process of paying the debt owed operators across the value chain of generation, transmission, and distribution.

He emphasised that the increase was based on supply, and that any customer that did not receive 20 hours power supply, should not be made to pay the new tariff.

He said the government was committed to ensuring sustainable reform in the sector, saying that there was need to clear the outstanding debt owed GenCos and gas companies.

To improve power supply, he said the government was investing in hydro electric power, adding that construction of 700 mega watt power in Zungeru had commenced, while Kashimbila Hydroelectric Power Plant of 40 mega watt was awaiting evacuation to improve generation.

The minister said there was also an on going investment of 26 small hydro power dams to boost electricity production across the country.