Power tariff may increase in statutory review by NERC
By Jeph Ajobaju, Chief Copy Editor
Electricity consumers may pay more from July after a tariff review being conducted by the Nigerian Electricity Regulatory Commission (NERC) amid unstable supply despite several government interventions in the sector.
NERC disclosed this in a notice of minor review of the Multi Year Tariff Order (MYTO) contained in a statement titled, “Notice of Compliance in Respect of the Biannual Review of the Revenue Requirements of Licensees”.
The notice, signed by NERC Chairman Sanusi Garba and posted on its website, comes after new rates were effected on 1 February.
Current grid generation from 20 plants is 3,378 megawatts (mw) and, by the rules, tariff increase is contingent upon improved performance by both generating companies (DisCos) and distribution companies (DisCos).
“Pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA), the Nigerian Electricity Regulatory Commission adopted the Multi-Year Tariff Order (MYTO) Methodology in setting out the basis and procedures for determination of licensees revenue requirements and review of electricity tariffs in Nigeria,” the notice said.
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Methodology for review
“The methodology provides for Minor Reviews (every 6 months), Major Reviews (every 5 years) and Extraordinary Reviews in instances where industry parameters have changed significantly from those used in the operating tariffs to such an extent that a review is required urgently to maintain the viability of the electricity industry.
“We wish to clarify that such reviews do not automatically translate to an increase in tariffs,” the notice added, according to reporting by Vanguard.
“Indeed where the impact of improved efficiency in operating parameters for individual licensees exceeds the impact of changes in macroeconomic parameters, end-user tariff may be reduced as exhibited in some tariff classes under MYTO 2022.
“In compliance with EPSRA and other relevant industry rules, this notice is issued to inform the general public and industry stakeholders of the Commission’s intention to commence the processes for the July 2022 Minor Review of MYTO 2022 to consider changes in relevant macroeconomic indices, generation capacity and CAPEX required for evacuation and distribution of the available generation capacity in compliance with extant rules.”