Connect with us
Advertise With Us

BUSINESS

NERC’s Attempt To Distance Self From July 1 Tariff Increase Unfair – DisCos

Published

on

The Electricity Distribution Companies (DisCos) has stated that recent attempt by the Nigerian Electricity Regulatory Commission (NERC) to distance itself from the July 1 commencement of a new service-based electricity tariff regime is unfair.

This position was contained in a statement released over the weekend by their umbrella body, the Association of Nigerian Electricity Distributors (ANED) and signed by its executive director of Research and Advocacy, Barr. Sunday Oduntan.

He said, “We are in a regulated sector. We cannot take a decision about a very critical aspect of the sector like tariff without a nod from the regulator (NERC)”.

“However, the regulator warned us of recent not to mention it to the federal government in any of our communication about the tariff increase with our customers. This is certainly very unfair.”

“Many stakeholders have expressed their concern at the unusual silence of our regulator on the upcoming increase and this makes it look like a unilateral decision of the DisCos”.

“We’ll like to inform Nigerians that tariff review (upward or downward) is the primary responsibility of NERC as our regulator. We are required to submit our proposals and they have the final say”.

“Hence, we were surprised to receive a letter from NERC to all the DisCos warning them not to mention their name or that of the federal government in any public communications on tariffs”.

In an earlier statement, ANED had appealed to the federal government to do something about the high cost of gas needed to generate power, in order to save the power sector.

The statement noted that the cost of gas remains one of the key determinants of the electricity tariff in Nigeria and it was high time the government found a way to help bring down the price in the interest of the sustainability of the power sector.

“Most of Nigeria’s power generating plants is thermal plants. At present, the energy generation mix is around 80 percent thermal and 20 percent hydro.

“They use gas as their fuel and as long as the price of gas is high, the cost of generation and the eventual tariff to the end user will also be high,” the statement noted.

According to the statement, the absence of a market-reflective tariff has continued to bedevil the sector and is at the moment responsible for most of the N1.5trn liquidity gap that has been threatening to derail the power sector reforms for years.

“With effect from July 1, a new performance driven increased tariff structure is set for implementation as a step towards narrowing the liquidity gap,” the statement noted.

MOST POPULAR