NERC okays increase in electricity tariffs from April 1

NERC okays increase in electricity tariffs from April 1

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Electricity users are to pay more for energy beginning from April 2020, according to the Nigerian Electricity Regulatory Commission (NERC).

POWER EQUIPMENT

It said the tariff review effective to achieve a cost-reflective tariff in the power sector which was approved in its ‘December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020,’ and released on December 31, 2019.

According to the order, effective from January 1, 2020, the tariff will reflect the impact of changes in the minor review variables in the determination of cost-reflective tariffs and relevant tariff and market shortfalls for 2019 and 2020.

The Commission said the order also determined the minimum remittances payable by the distribution companies (DISCOs) in meeting their market obligations based on the allowed tariffs.

“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 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,” it said.

According to NERC, all Discos are obligated to settle their market invoices in full as adjusted and netted off by applicable tariff shortfall.

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“In 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,” it said.

There have been calls for a coat reflective tariff by stakeholders due to the illiquidity challenge in the power sector.

However, previous moves by NERC to review the price in the past, was greeted with backlash in the National Assembly.

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