Upward Review of Electricity Tariff in the Offing

Electricity consumers in the country are in for another price hike if the regulatory body, the Nigerian Electricity Regulatory Commission (NREC), harkens to the wish of the Association of Nigerian Electricity Distributors for upward review.
The distributors are pushing for about 200 per cent hike in electricity tariff as against the current price paid by residential consumers.
Going by the proposal by power distribution companies, the average energy charge would be N105 per kilowatt-hour from the current rate of 22.8KWH.
The power firms attributed their latest push for tariff increase to high inflation rate in the country, scarcity of foreign exchange, devaluation of the naira and the huge debts being owed them.
The Chief Executive Officer, Association of Nigerian Electricity Distributors, an umbrella body for the Discos, Azu Obiaya, confirmed the latest agitation for tariff increase, saying that it was important to raise the tariff in order to remain in business and serve the people well.
Azu said, “To review the tariff, we will be looking at an average rate of N70 per kilowatt-hour for residential consumers. But some Discos will like to have the rate as high as N105/kWh.”
The Discos said they have tabled the proposal before the NREC but no action had been taken on it yet.
He also stated that one reason many Discos had not metered their customers was due to the huge debts owed them, as well as the tariff issue.
This, he said, had hampered the operations of the different Discos, a development that had made it difficult for the companies to meet the funds remittances required of them by the Market Operator.
Obiaya said, “Discos are experiencing revenue shortfall on a monthly basis of N38bn. As of June 2016, the MDAs owed the Discos N53bn post-privatisation.
“The books of the Discos are so bad that they have no chance anymore to access finance. These books do not reflect the cash flow that is necessary for them to be taken seriously by any lender.”
Recall this demand is coming less than eight months after about 45 per cent increase in tariff was imposed on electricity consumers across the country.

Author: News Editor

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