FG set to review electricity tariffs, 6 months after carrying out similar exercise, provides explanation

FG set to review electricity tariffs, 6 months after carrying out similar exercise, provides explanation

  • The Nigerian Electricity Regulatory Commission (NERC) has revealed plans to review electricity tariff
  • The review is coming six months after a similar exercise that introduced a new tarrif for energy consumers
  • As at the end of December 2021, there were over 12.78 million registered energy customers population

The Nigerian Electricity Regulatory Commission (NERC) will from July 1, 2022 review electricity tariffs, about six months after carrying out a similar exercise, ThisDay reports.

In a memo marked: Notice Of Compliance in Respect of the Biannual Review of the Revenue Requirements of Licensees, the power sector regulator said that the adjustment will cover among others, changes in relevant macroeconomic indices.

However, it stated that it would not necessarily lead to a tariff increase for consumers, noting that some end users may actually have their rates reviewed down if the data available indicated.

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NERC, electricity tariffs
A new change in electricity tariff is coming Credit: NERC
Source: Getty Images

NERC document reads:

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"Pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA), it 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."

NERC also explained that the methodology provides for minor reviews (every six months), major reviews (every five years), and extraordinary reviews in instances where industry parameters have changed significantly from those used in the operating tariffs.

This is said is to such an extent that a review is required urgently to maintain the viability of the electricity industry.

Electricity tariff increase

Legit.ng had earlier reported that NERC recently released documents approving tariff increases for Distribution Companies (Discos), about four months after the implementation of the new rates commenced.

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In separate orders issued to the 11 Discos, NERC noted that the “minor” hike in tariffs was to compensate for market fundamentals outside the control of the electricity distributors.

In reaction, the Chairman of NERC, Mr Sanusi Garba, explained that there were no new hikes, apart from the review approved in December, maintaining that the bi-annual review was to take care of inflation, foreign exchange, and generation volume among others and insisting that it is part of MYTO.

Nigeria plans to construct its first nuclear power plant

Meanwhile, Federal government of Nigeria has announced plans to build a nuclear power plant to address the country's electrical challenges.

The World Bank recently ranked Nigeria as having one of the worst power supply in the world, and the Federal Government will be hoping that the new plant can change that narrative.

Deals have already been inked with Russia and Pakistan to train Nigerians on how to effectively run the proposed power plant

Source: Legit.ng

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