“Eligible Customer” policy will raise tariff by 14% – Discos - OrientEnergyReview

“Eligible Customer” policy will raise tariff by 14% – Discos

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The Eligible Customer policy introduced by the Federal Government in the power sector will lead to a 14 per cent increase in the electricity tariff payable by residential consumers across the country, power distribution companies have said.

In July this year, the Minister of Power, Works and Housing, Babatunde Fashola, explained that the policy was to enable heavy consumers using at least two megawatts of electricity to invest in the provision of the equipment and take power directly from generating companies that had the power.

Fashola, who observed that power distributors initially resisted the policy, said they later reluctantly endorsed it. But in one of their latest documents on Nigeria’s power sector and the eligible customer policy, the Association of Nigerian Electricity Distributors, said they had no issue with the declaration by the government, but stressed that the policy would warrant a significant increase in residential tariff.

The Discos said, “The removal of customers that are designated as ‘eligible customers’ means that the premium customers that currently cross-subsidise the largest residential customer class can be removed from the pool of Discos’ customers, thereby resulting in a gap in revenue that will result in a significant tariff increase, currently estimated at 14 per cent.”

Source: The Punch

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