The Nigerian Electricity Regulatory Commission (NERC) yesterday confirmed that it plans to review electricity tariffs using the Multi Year Tariff Order (MYTO) method.
NERC described the action as part of the periodic evaluation of software models utilised by the Commission.
A statement issued by NERC’s head, Media, Mrs. Vivian Mbonu, explained that the plans to review the MYTO financial model was to ensure its integrity and consistency of the platform with approved tariff principles pursuant to the numerous updates undertaken since inception of the methodology in 2008.
It further explained that the holistic review of the MYTO model includes aligning the basic assumptions and parameters with the underlying principles of the tariff methodology and ascertaining the full workability of the macros and other formulae.
The move, she said was an important initiative of the Commission in preparation to commence review of Performance Improvement Plans (PIP) to be submitted by utilities for the tariff period 2019-2023.
The statement dismissed recent media reports saying the Commission has dumped the MYTO methodology describing it as inaccurate.
“The Nigerian Electricity Regulatory Commission hereby reaffirms that there are no plans to dump the Multi Year Tariff Order (MYTO) framework used in determining end-user tariffs based on revenue requirement of the electricity industry,” part of the statement read.
NERC said it would continue to use the MYTO as the framework for determining tariffs, and in line with the provisions of the EPSR Act 2005, ensure that prices charged by licensees were fair to consumers and were sufficient to allow licensees recover the efficient cost of their business activities whilst earning a reasonable return on the capital invested in the business.
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