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Electricity Supply: Stakeholders Caution NERC Against Upward Review



By ABAH ADAH, Abuja –

Stakeholders in the Nigerian Electricity Supply Industry (NESI) have advised against any attempt at jerking up the electricity tariff as NERC holds consultations towards reviewing the Multi-Year Tariff Order 2015 which though signed in 2015, became effective from February, 2016.

Speakers at the consultation being held by the  Nigerian Electricity Regulatory Commission (NERC) in Abuja yesterday expressed fear that any upward review (increment) of electricity  tariff may lead to a worse economic crisis now that the country has just managed to wriggle out of recession.

NERC is holding consultations with stakeholders in each of six geopolitical zones across the country to look into possibility of coming up with new regulations on MYTO methodology, Business Continuity, and Eligible Customer Declaration, today being the second and final day it is being held  in Abuja for the Northcentral, after it was first done in Lagos for the Southwest last week.

According to the MYTO rule, MYTO 2015 which is a 10-year tariff plan for electricity consumption is to be reviewed every six months under what is called “Minor Review” to reflect changes that may be caused by some social factors which include foreign exchange and inflation rates,  power generation capacity and price of gas as they affect production.

However,  NERC has failed to do the review, which requires that it conducts consultation like this prior to adjustment, since 2015-phenomenon attributed by analysts to the inability of  NERC,  which is without a substantive Chairman to date, to have a board of commissioners until lately, and the recession that set in.

The Spokesperson for the Network for Electricity Consumers Advocacy of Nigeria (NECAN), Tomi Akingbogun who noted the monthly, quarterly or even annual review as proposed by NERC will be too frequent advised NERC against over protection of investors’ interest against national interest of affordable power to the citizenry.

“Considering the fact that we have just technically put recession behind us, any tariff review that would plunge the economy back into further crisis should not be considered,” he remarked.

Akingbogun maintained that the electricity industry is just one out of others in the economy who are also suffering liquidity crisis in the bad economy with nobody to talk about let alone, protect them, and as such should not be focused  on as if it is the only one.

On his part, the CEO,  ZKJ energy Partners, Rumundaka Wonodi suggested the review be put at quarterly instead of monthly while a tangible working capital is made available to support the operators in the meantime to mitigate the problem of liquidity and encourage investors.

NERC Commissioners at the event were however quick to allay the fears being expressed, explaining that to review does not necessarily mean tariff increase.