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From Isaac Anumihe, Abuja
The Nigerian Electricity Regulatory Commission (NERC) has approved an increase in electricity tariff for customers under the Band A classification but industry players are sceptical that even with the increase power is not likely to be stable
The increase is coming against the backdrop of the promise by the Minister of Power, Chief Adebayo Adelabu that tariff increase was not foreseeable in the near future because of the hardship Nigerians are facing.
But speaking to newsmen in Abuja, the Vice Chairman of NERC, Musliu Oseni, said the increase will see the customers paying N225 kilowatts per hour from the current N66.
He noted that customers under Band A are those who enjoy 20 hours of electricity supply daily.
According to Oseni, customers in Band A represent 15 per cent of the 12 million electricity customers in the country adding that the commission had also downgraded some customers in Band A to Band B due to the non-fulfilment of the required hours of electricity provided by the electricity distribution company.
“We currently have 800 feeders that are categorised as Band A, but it will now be reduced to under 500. This means that 17 per cent now qualify as Band A feeders. These feeders only service 15 per cent of total electricity customers connected to the feeders.
“The commission has issued an order which is titled ‘April Supplementary Order’ and the commission allows a 235 kilowatt per hour,” he said, noting that the review will not affect customers on the other bands in D and E who receive fewer hours of electricity per day.
Given the increase, industry players still expressed doubt over the regular supply of power.
In his remarks, the Chief Technical Officer of FGN Power Company, Engineer Idowu Oyebanjo said that if NERC is increasing power based on regular supply of electricity, how would it monitor that a customer who’s supposed to have 20 hours gets less?
“It’s just for only a few people who are in band A. The only challenge I have there is, how do you ensure that those customers get 24-hour supply?
“How do you monitor that a customer who’s supposed to have 20 hours got only five hours in a day? How do you make sure that he doesn’t pay for darkness?
“You are increasing the tariff based on the assumption that power will be stable. It’s very obvious that power can’t be there” he submitted.
But a mini-grid developer, Foluso Alabi argued that the increase is overdue, arguing that Nigerians will not get a regular supply of electricity with such a low tariff
He said that the current tariff has not been cost-reflective, adding that the power supply value chain has not been profitable.
“The power generation and supply have not been profitable in Nigeria. Tariff initially have been subsidised by the government. To be fair, it has not been cost-reflective in terms of generation, transmission and distribution. You find out that the distribution companies (DisCos) have not been profitable.
On the mini-grid side, the tariff has not been looking good
“On the N900 billion the government has promised, I don’t know where the government will get such money from. So, what the government is trying to do is let the market forces dictate price.
“Nigeria pays the lowest tariff in Africa —–Kenya, Ghana, Cameroon.
There’s no way Nigerians will pay N60 and expect a steady power. It is not possible.
It’s (increase) a right step in the right direction. But there should be regulation to guide the cap if power must be resilient and stable.
Adelabu promised to subsidise power with N900 billion in December, last year.
Adelabu said this during his meeting with the National Union of Electricity Employees (NUEE), in Abuja in November 2023.
