July Tariff Increase: NERC is Involved, Discos Insist
Electricity distribution companies (DisCos) have explained that the July increase in electricity tariffs was not a unilateral decision by the power firms but taken along with the regulator.
The DisCos on Sunday said that the Nigerian Electricity Regulatory Commission (NERC) was involved in the decision, insisting that DisCos could not increase tariffs without the involvement of the regulator.
The electricity distrubtiion companies made this known while reacting to an alleged attempt by the regulatory body to dissociate itself and the federal government from the July 1 commencement of new electricity-tariff regime.
The Nigerian Electricity Regulatory Commission (NERC) had in March postponed the take-off of the new electricity tariff by the DisCos which was to commence on April 1, 2020.
Some of the reasons citied by NERC include that 60 per cent of electricity customers are unmetered nationwide and is a “major impediment to both an immediate tariff review and revenue protection of DisCos”.
It also cited the COVID-19 pandemic stating it has significantly impacted the ability of DisCos to meter customers through the meter asset provider scheme (MAP).
However, power distributors had since last week been announcing the implementation of the new tariff beginning from July 1.
The officials reacting to the announcement by the DisCos on tariff increment warned the electricity distribution companies to stop mentioning the name of the commission when making such announcements.
“The tariff is for them. They requested that it be increased. They should tell customers why it has to rise and should stop mentioning NERC when announcing it,” an official of the commission who spoke to our correspondent in confidence said.
But speaking under the aegis of the Association of Nigerian Electricity Distributors, the Discos faulted the stance of NERC.
The Executive Director, Research and Advocacy, ANED, Sunday Oduntan, said, “We are in a regulated sector. We cannot take a decision about a very critical aspect of the sector like tariff without a nod from the regulator.
“We would like to inform Nigerians that tariff review (upward or downwards) is the primary responsibility of NERC as our regulator. We are required to submit our proposals and they have the final say.
“Hence we were surprised to receive a letter from NERC to all the Discos warning them not to mention their name or that of the Federal Government in any public communications on tariffs.”
“The fact that the action is deliberately made to look unilateral is capable of creating public resistance, effectively setting Discos up for failure,” Oduntan said.
Meanwhile, the Enugu Electricity Distribution Company on Sunday said it would begin the implementation of the new service reflective electricity tariff from July 1.
A statement by the EEDC’s Head of Corporate Communications, Emeka Ezeh, said the new tariff became necessary to improve efficiency in delivering quality service to customers.