The Nigerian Electricity Regulatory Commission (NERC) issued an immediate directive for the review of electricity tariffs in the country on Saturday, January 4th. The order was issued to the 11 electricity distribution companies (DISCos) on December 31, 2019, as stated on the commission’s website in a joint statement signed by the Chairman of the Commission, Joseph Momoh, and the Commissioner for Legal, License & Compliance, Dafe Akpeneye.
The directive affects the following electricity distribution companies: Abuja Electricity Distribution Company, Benin Electricity Distribution Company, Enugu Electricity Distribution Company, Eko Electricity Distribution Company, Ibadan Electricity Distribution Company, Ikeja Electricity Distribution Company, Jos Electricity Distribution Company, Kaduna Electricity Distribution Company, Kano Electricity Distribution Company, Port Harcourt Electricity Distribution Company, and Yola Electricity Distribution Company.
Under the new order, Enugu electricity consumers who previously paid about N17.42 per kWh will now pay about N30.93 kWh from January 1. Similarly, R2 and R3 electricity consumers will see their rates increase from N19.31 and N27.11 per kWh to N34.28 and N48.12 per kWh.
Customers of Ikeja electricity who previously paid about N13.34 per kWh will now pay N21.80 per kWh. Residential (R2) and R3 consumers in Ikeja who have been paying N13.34 and N26.5 per kWh since 2015, will now be paying N21.30 and N21.80 per kWh.
This review also affects commercial consumers, who have been paying between N20.45 and N27.20 per kWh since 2015 and will now be paying between N37.39 and N47.09 per kWh. Industrial customers in Abuja will see an increase from paying between N20.95 and N27.22 per kWh to between N36.07 and N47.09 per kWh. Additionally, special category customers in Abuja who have been paying about N20.06 per kWh since 2015, will now be paying about N35.74 per kWh.
It was also announced by the commission that the Federal Government is prepared to fund the revenue difference resulting from the variance between cost-reflective tariffs and the actual electricity tariffs paid by consumers.
The statement from the commission mentioned, “The Federal Government’s updated Power Sector Recovery Program does not envisage an immediate increase in end-user tariffs until 1st April 2020 and a transition to full cost reflectivity by the end of 2021. In the interim, the Federal Government has committed to funding the revenue gap arising from the difference between cost-reflective tariffs determined by the commission and the actual end-user tariffs payable by customers.”
“All FGN intervention from the financing plan of the PSRP for funding tariff shortfall shall be applied through NBET and the market operator to ensure 100 per cent settlement of invoices issued by market participants. Effectively, this order places a freeze on the tariffs of TCN and administrative charges until April 2020 at the rates applied in generating MO invoices for the period of January to October 2019.”