NERC Approves Triple Increase in Electricity Tariff for Band A Customers

NERC Approves Triple Increase in Electricity Tariff for Band A Customers

  • The federal government has announced an increase in electricity tariff, signalling a 300% hike from the former rate
  • According to NERC, the increase will only affect customers in Band A, as customers in the other bands are not affected
  • Customers on Band A account for only about 15% of the total, and they enjoy 20 hours of average hours of supply journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

The Nigerian Electricity Regulatory Commission (NERC) has given the green light to increase electricity charges targeted at customers categorised under Band A.

Musliu Oseni, the Vice-Chairman of NERC, disclosed this ratification during a press briefing held in Abuja on Wednesday.

Electricity tariff
NERC clarified that customers in the remaining Bands would not be affected by the review. Photo credit - Energize, Power Africa
Source: UGC

The latest increase confirms's earlier report of the federal government's plan to triple energy tariffs to attract investment into the sector and slash the subsidy it pays to keep the tariffs down.

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Oseni elucidated that patrons under this classification, benefiting from a daily provision of 20 hours of electricity, will now be subject to a tariff of N225 per kilowatt (kW), effective from April 3, marking a significant increase from the previous rate of N66.

Tariff hike affects only Band A customers

According to Premium Times, this adjustment reflects an increment of nearly threefold compared to the prior rate.

Oseni stated that the commission conducted a thorough examination of the application submitted by the distribution companies.

They have now concluded that only feeders comprising 17% or less and customers numbering less than 15% will experience any rate adjustments that the commission might authorise for the DisCos.

He said:

“Further to that, the commission has issued an order titled ‘April 2024 Supplementary Order’ which is supplementary to the order issued in December, effective January 2024.

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“So, the April Supplementary order takes effect from today and in that order, the commission has approved a rate review of N225 per kilowatt-hour for just under 50 percent of the customer population in NESI.
“So that means that less than 15 percent of the customers will be affected. And I am sure you are aware of the number of customers we have in NESI. And these are the customers that are proven to be enjoying 20 hours of average hours of supply.”

Oseni, however, clarified that customers in the remaining Bands would not be affected by the review.

It would be recalled that in January 2024, FG had given approval to NERC to carry out an upward review of electricity tariffs.

Speaking on the matter, Wale Ogundeji, an energy analyst, condemned the recent tariff increase by the NERC.

He told that the increase will strain the pockets of many Nigerians and greatly affect household budgets.

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He said:

"Firstly, consumers are likely to experience a direct effect in the form of elevated electricity costs. The implementation of heightened tariffs would necessitate consumers to allocate more funds for the same level of electricity consumption. This may impose financial pressure on households, particularly those belonging to low and middle-income brackets."

He therefore advised the federal government to consider reverting the hike as this will no less add to the burden Nigerians are currently bearing.

Minister tells DisCo to publish names of debtors had previously reported that the Minister of Power, Adebayo Adelabu, had urged the Benin Electricity Distribution Company (BEDC) to publicly disclose the names of individuals or entities who owe the company debts.

This directive was issued during a meeting between the minister and the BEDC management while inspecting power projects in Benin, the state capital.

Adelabu stated that disclosing the names of the company's debtors is justified since electricity supply comes at a cost and is not provided for free.

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He emphasised the importance of revenue for BEDC to sustain its operations and adequately serve its customers.


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