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NERC put hold to increase of electricity tariff

The Nigerian Electricity Regulatory Commission (NERC) has on Tuesday announced the suspension of increase in electricity tariff for end-use customers till July.

NERC had earlier proposed the hike electricity tariff from April 1st 2020.

However, the increase was described by most stakeholders as one of the most callous decisions in the face epileptic power supply as well as lockdown of economic activities and the many implications of the coronavirus pandemic.

NERC chairman James Momoh, in an order released on Tuesday, also directed all distribution companies to submit a detailed plan for the attainment of full recovery of prudent costs and allowed return on capital revenue requirements by 30 June 2021.

The revenue recovery and financial sustainability plans shall be submitted to the Commission no later than 21 April 2020. The plans shall include a path, with timelines, for transiting customers to a higher quality of service.

NERC also directed the DisCos to submit revised Performance Improvement Plans based on the key objective of improvement in service for and use customers and transiting to full revenue recovery no later than 21 April 2020.

According to the commission, the approved plans shall form the basis for future tariff reviews and full col recovery.

“All future tariff reviews shall be on the basis of consultations between the Disco and customer clusters with firm commitments on rates and quality of service. The service level compact shall include a compensation mechanism for end-use customers to address the Disco’s failure events to deliver on performance forges.

“All Discos shall be required to disaggregate their respective service areas and/or customers in accordance with the quality of service and supported by the proposal for service reflective tariff classes that shall be graduated by quality of service,” NERC stated in the report.

The regulator further directed all the distribution companies to, no later than 30 June 2020, provide smart meters at 11kV and 33kV feeders level with the capability of sending real-time or near real-time data to the Commission.

“The Federal Government of Nigeria shall provide full support during the transitional period to full revenue recovery ending on June 30, 2021, based on the under-recovery of the revenue requirement determined,” the order stated.

Muhammad A. Aliyu

Muhammad Ameer Aliyu, is a prolific journalist who joined Okay Nigeria in 2015 with the aim staying committed to bringing more positive growth to the digital news platform. He is the Senior editor at Okay Nigeria.
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