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Electricity tariff hike looms in Nigeria as NERC concludes ‘extraordinary review’

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Electricity tariff hike looms in Nigeria as NERC concludes ‘extraordinary review’

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By Ediri Ejoh with Agency Report

There are indications of possible hike in electricity bills in Nigeria as the Nigerian Electricity Regulatory Commission, NERC, said it is concluding the Extraordinary Tariff Review process for the 11 Electricity Distribution Companies, DISCOs.

In a notice obtained from its website, NERC stated that the review was pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA).

According to the notice, extraordinary tariff reviews are carried out in instances where industry parameters have changed from those used in the operating tariffs to such an extent that a review is urgently required to maintain the viability of the industry.

The commission said it would also commence the processes for the July 2021 Minor Review of the Multi-Year Tariff Order (MYTO-2020), which is done every six months.

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NERC noted that it would put into consideration changes in inflation, foreign exchange, gas prices, and available generation capacity, adding that it would also consider Capital Expenditure (CAPEX) required evacuating and distributing the said available generation capacity in accordance with EPSRA and other extant industry rules.

“Further to the above, the commission held series of public hearings and stakeholder consultations in the first quarter of 2020 on the Extraordinary Tariff Review Applications of the 11 DISCOs to consider their respective five-year Performance Improvement Plans (PIPs).

“However, the evaluation of the DISCOs requests for review of the CAPEX proposed in their PIPs could not be concluded for the consideration of the commission during the Minor Reviews undertaken in 2020.

“Specifically, Section 21 of the MYTO – 2020 Order provides for consideration of DISCOs’ CAPEX application upon further scrutiny and evaluation of the investment proposals.”

Vanguard News Nigeria

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