THE decision of the Nigerian Electricity Regulatory Commission (NERC) to abolish the controversial ‘fixed charge’ is a welcome development. But, the introduction of new tariffs remains contentious. The new tariff regime is in spite of the call by the House of Representatives for a stay of action on a review. The new rates, according to NERC boss, Dr. Sam Amadi, will take effect from February 2016.
Highlights of the new tariffs show that consumers will henceforth witness different levels of increases across the country, but will no longer pay the monthly fixed charge. Currently, consumers pay fixed charges ranging from N220 to N750 for residential consumers, depending on their locations, and thousands of naira for commercial users. However, Amadi has assured that consumers who have disputes with power supply operators should not be disconnected until such disputes have been resolved.
It is heartening that the new tariffs come with strict conditions for the Distribution Companies (Discos). Part of the conditions is said to have committed them to new service delivery agreements they reportedly entered into with NERC.
Also, by the new tariff regime, residential customer classification (R2), for instance, in Abuja, will no longer pay N702 fixed charge every month. However, their energy charge will henceforth increase by N9.60 per kilo- watts per hour (Kwh). In the same vein, Residential customers (R2) in Eko and Ikeja, Lagos will now pay an increase of N10 and N8 respectively.
Similarly, the current fixed charge payable by consumers in Benin and Kaduna is abolished, but they have to contend with increase of N9.26 and N11.05, respectively. In addition, the Discos by the new deal will now be made to strictly fulfill their metering commitments and other related service delivery contracts with NERC.
Even though consumers may have got reprieve on the controversial fixed charges, it is saddening that the regulatory authority has succumbed to the pressure from the power companies to approve higher tarrifs. This increase is in spite of the fact that the power supply situation is still below expectation despite the optimism that heralded the privatisation of the sector two years ago. The slight improvement that followed the inauguration of President Muhammadu Buhari’s government seven months ago has not been sustained. Therefore, the approval of a hike in tariff cannot be well received by the people.
The increase has come barely seven months after NERC slashed electricity tariff across board by 50 percent in the face of the people’s growing dis- satisfaction with the level of electricity supply.
We are inclined to believe that the discos are more interested in prof- it margin than service delivery. It bears repeating that many of the discos have done very little in terms of service delivery to deserve a hike in tariff. We agree with Manufacturers Association of Nigeria (MAN), the Nigeria Labour Congress (NLC) and the Nigeria Bulk Electricity Trading Plc that many of the Discos lack capacity building initiatives that are required to give regular power supply on a sustainable basis.
It is regrettable that in spite of the important role of the power sector in the economy, and despite the huge investments in it over the years, the level of electricity available to Nigerians remains a huge national embarrassment.
We urge the power companies to brace up and design strategies for delivery of regular supply to Nigerians at a reasonable cost. For now, the in- creasing cost of electricity is not justifiable. Let the power companies do all that is necessary to significantly boost supply. The challenge of regular electricity supply is a big national problem that must be solved.
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