Why FG won’t hike electricity tariff – Minister

The Minister of Power, Engr. Sale Mamman, Friday,  disclosed that it is not planning to hike the electricity tariff.

Rather, he said, Nigerians should expect an increased efficiency in the power sector.

The clarification came amidst reports of possible major increase in the price of electricity by the Nigerian Electricity Regulatory Commission (NERC)  that has dominated the public space.

The minister in a statement he issued in Abuja explained that the order issued by NERC on April 26, 2021 titled: “Notice of Minor and Extraordinary Review of Tariffs for Electricity Transmission and Distribution Companies” was a routine procedure.

He said the review planned by NERC is in accordance with Section 76 of the Electric Power Sector Reform Act of 2005.

“The tariff for customers on service bands D & E (customers being served less than an average of 12hrs of supply per day over a period of one month) remains subsidized in line with the policy direction of the Federal Government”, he said.

The minister said Section 76 of the Electric Power Sector Reform Act of 2005 provides clear guidelines for the periodic review of tariff (based on market data and submissions from licensees).

The guidelines include the provision that the commission shall give notice of activities related to tariff “in the Official Gazette, and in one or more newspapers.

“The Multi-Year Tariff Order (MYTO) per NERCs regulation obtains inputs from operators in the market every 6 months to perform minor reviews and a major review is required every 5 years. 

“Thus, as in January a minor review will occur in June. Given the timing for the extraordinary review has also elapsed, a review will occur for consideration in January 2021,” Mamman said.

“NERC to conduct an extraordinary review of the MYTO to further review factors and align them with current evolving realities.

“The reason this recommendation was posited by the committee was to ensure that efficiencies could be derived from an extraordinary review to further reduce tariff”, the minister said.

He said government was committed to increasing supplied energy to the grid through rapid expansion of infrastructure through the various facilities for the sector either to the DISCOS under strict terms or to the Transmission Company of Nigeria. 

“Furthermore, the National Mass Metering Program is on course to reduce losses. To date more than 500k meters have been delivered to DISCOs in phase 0 of the program in 5 months (this exceeds the progress done for the entire MAP scheme). We will eliminate the metering gap during the life of the administration,” he said.

Mamman said the federal government was not unaware of the challenges that Nigerians face, stating that it has continued to subsidise the band D and E consumers to pre-September 2020 rates (55% of grid connected customers). 

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