In response to public outcry against the continuous poor electricity supply in Nigeria, the House of Representatives made several interventions in the past, and this was subject of review piece on this page last week. Seemingly not yet done with such moves, especially in the wake of the controversies generated by the recently announced plan to increase tariff, for the umpteenth time, the House committee on Power engaged stakeholders last week and came out with a directive to the relevant agencies to halt the plan, JOSHUA EGBODO writes
Anger over propriety of tariff hike
To many Nigerians, the new billing regime as contemplated by the Nigeria Electricity Regulatory Commission (NERC) under its newly reviewed Multi Year Tariff Order (MYTO) was ill-timed, when consumers were groaning under the worst condition of power supply, with unfair rates, especially under the estimated billing scheme.
In the opinion of analysts and critical stakeholders in the sector, a lot needed to be done before any thought of tariff increase could be condoned by consumers. For instance, greater percentage of consumers across the country were yet to be metered, thereby leaving them at the mercy of the power Distribution Companies (DISCOs), who fix figures at their whims for the hapless customers.
Reps too
The House of Representatives committee on power appeared to be on the same page with those against the overbearing burden of unfair electricity charges. It was therefore not surprising, when after meeting with the DISCOs, NERC and the Federal Ministry of Power, the committee asked NERC to ensure the suspension of the planned increase in tariff, until all consumers have been supplied prepay meters.
Poor consultations
As concerns were widely expressed earlier by many analysts, Chairman of the committee, Hon. Da’u Magaji Aliyu, while giving the order precisely last Wednesday, queried NERC and the DISCOs over the latest plan to increase electricity tariff, as he pointed out that adequate consultations were not made before the decision was arrived at, leaving even relevant committees of the National Assembly in the dark.
Worrisome discriminatory tariffs
The committee also vented its anger over statistics revealing that the DISCOs were issuing discriminatory tariffs, depending on location or region of the country.
NERC in its published new tariffs under the latest MYTO review for the DISCOs, as they apply to different level of customers indicated that some who were paying N27.11 per kilowatt hour (kWh) are expected to be charged N48.12 per kWh under the new tariff order. Under the new plan, all categories of consumers, save for those classified under residential (R1) ranged between 59.7 percent increase for consumers in Ikeja and about 77.6 percent in Enugu.
Under the new order, electricity consumers in Ikeja who used to pay about N13.34 per kWh will from April 1, pay N21.80 per kWh. Their counterparts in Enugu who used to pay about N17.42 per kWh will, under the new order, pay about N30.93 kWh. Their R2 and R3 counterparts, who paid about N19.31 and N27.11 per kWh since 2015, will now be paying N34.28 and N48.12 per kWh.
Following the discovery of the discriminatory tariff arrangement across the country, the committee immediately announced that the National Assembly would not allow Nigerians to be charged different rates on the basis of location, insisting that the planned tariff regime was not something the people were used to. The chairman therefore noted that electricity tariffs in the country should be uniform.
“It (tariff) has to be uniform because the poor Nigerian in my village is the same poor Nigerian that is paying power in Nnewi or Ado Ekiti. People will not understand so you have to do a lot of media work for people to understand what you mean”, Magaji told NERC.
Illegal movement of NIBET
Also of great worry to the committee was the revelation by NERC that the Nigeria Bulk Electricity Transmission (NIBET) had under a presidential directive, been moved to be superintended by the federal ministry of finance, instead of that of power, under which it was by law created. The committee kicked against the presidential directive, describing the move as illegal. The committee demanded to know under what powers such a directive was issued.
The committee further disagreed with NERC over unconfirmed reports that 50 percent of electricity consumers in Nigeria already have prepay meters installed.
Tariff hike may come, but…
The committee made its position clear that it was not working in antagonism with the government, but rather to seeing that the preliminary needfuls be be done first. To this end, the chairman said “Let me assure you and the minister that we are here to support this government to achieve its objective. We are not against a cost reflective tariff; we are only calling on government to do the necessary things before this kind of thing is brought out…
“If you can see, there are so many unresolved questions; I pity the DISCOs, (because) there are locations that they cannot even go to collect the tariff. They have a lot of debts, but we have to do it logically… I’m sure that we’ll get feedback from Nigerians”.
Justification of hike
While speaking on the role of NERC on the planned increase in electricity tariff, Chairman of the Commission, represented by Mr. Samsudeen Mahmoud, argued that the Power Sector Reform Act empowered the NERC to twice in a year, carry out minor review of MYTO, to ensure that DISCOs charge “cost reflective” tariffs. He was to dramatically withdraw the statement, when questions were asked on the specific provisions, noting that the Commission derives such power from its operational guidelines instead.
He explained that several factors, including the rise in exchange rate, inflation and losses, including cost of energy applicable to respective DISCOs were the bases of the reviewed rates. “This time, it’s going to be a minor review based on exchange rate and inflation rate. We also review to reflect fuel price changes”, he stressed.
On his part, the Minister of Power, Mr. Saleh Mamman, represented by the acting permanent secretary in the ministry, Ahmed Abdul explained that the federal government has indicated its desire to completely withdraw the subsidy it was providing on electricity, with hope that the total withdrawal would be effective from April 1, 2020, adding that the move accounted for the upward review; putting the rates at between N55 per Kilowatt to about N70 per Kilowatt, depending on the cost energy to the respective DISCOs.
Gbajabiamila to the rescue?
Chairman of the House of Representatives committee on power, Magaji in bringing the meeting to an end last week, disclosed that Speaker Femi Gbajabiamila was set to hold a stakeholders’ interactive session over the new development this week, after which position of the House would be made known.
A commendable move, according to many Nigerians, especially that it wouldn’t be his first intervention in attempts at addressing nagging issues in the power sector. His decision to sponsor the Bill prohibiting the use of estimated electricity tariffs by the DISCOs was a ready reference point. Though yet to be signed into law, the Bill provided that it would amount to a crime for any of the DISCOs to use estimated tariff, where a customer applied for prepay metre, and is not provided within 30 days.
Nigerians can only hope, and are patiently waiting to see outcome of the engagement; whether the expected deliberations would provide the much desired rescue.
