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From Isaac Anumihe, Abuja
Amidst the outcry over unbearable tariff increases, Aba Power Limited Electric (APLE) is asking for a 163% increase in electricity tariffs.
The tariff, according to the electricity company, should be increased for Abia State customers from N99.90 per kilowatt-hour (kWh) to N263.08/kWh by 2025.
APLE, which is owned by Geometric Power Group, is a ring-fenced distribution company that provides electricity to Aba metropolis, consisting of nine local governments in Abia State. The review would also lead to increases for customers in other bands, with Band A-MD1 rising to N283.09/kWh from N107.50/kWh, and Band B-Non-MD increasing from N95.70/kWh to N252.03/kWh, among others.
Speaking at a public hearing organised by the Nigerian Electricity Regulatory Commission (NERC) on the tariff review today in Abuja, Managing Director of APLE, Ugo Opiegbe, said the tariff review is necessary to enable the company to meet its operational costs, which have been affected by inflation.
According to him, operational costs have increased astronomically since the last tariff increase was granted.
He stated that the previous review pegged the tariff charge for Band Non-MD customers at N99.90/kWh, which is below the bills the company is receiving from electricity generation companies supplying its power.
“When we signed the Power Purchase Agreement (PPA) with the Niger Delta Power Holding Company (NDPHC) sometime in 2022, NERC approved a tariff of N21/kWh. Today, the last invoice we got from NDPHC was N136/kWh. That’s the conundrum we have found ourselves in. That’s the major reason why we are here, pleading for NERC’s approval for this,” he explained.
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He noted that macroeconomic developments in the country have made it difficult for APLE to continue operating under the current tariff regime.
“There are some dollar-backed projects we are working on, which will be difficult to realise if we continue operating under the current tariff regime.”
He stated that as long as there is constant electricity supply, a tariff hike would not be a major issue. The company is ready to supply power when its tariff is increased to meet all contractual obligations. He added that the company has proved its status as a reliable electricity provider, having invested in the generation and distribution of electricity for its customers.
Opiegbe further said that infrastructure limitations have hindered the company from going completely off-grid to supply electricity to its franchise area, but these issues would be resolved in the coming years when it starts sourcing electricity from Geometric Power Aba Limited (GPAL), its sister company.
The MD also noted that the current tariff has caused the company to incur over N26 billion in debt to the NDPHC. Its monthly invoice from the NDPHC has increased to N1.5 billion, of which it can only pay N500 million, while its invoice from GPAL is N1.2 billion, of which it pays N700 million.
In his response, the Vice Chairman of NERC, Musiliu Oseni, said the commission would critically examine the parameters set by the company to determine the proposed costs and ensure that customers are not exploited.
“So, when your customers are happy, they will be willing to pay more to you, so that you can also improve on your operational performance. I think that aspect, we need to look at it critically. It’s quite good that you have already concluded the process. Before we allow your cost to be passed on to the end user, we’ll have to look at it and see the problems it might cause or otherwise,” Oseni stated.
