By John Ofikhenua, Abuja
The Nigeria Electricity Regulatory Commission (NERC) has insisted on starting the implementation of the new electricity tariff increases on April 1.
The NERC dropped the hint that the Power Sector Review Programme (PSRP) has proposed the elimination of tariff support in the electricity market by the end of 2021, except for the less-privileged customers who would continue to be supported under the Consumer Assistance Fund or any other intervention.
It made this known in a document titled ‘Consultation paper on the proposed extra-ordinary tariff review of the MYTO -2015 Tariff Order for the Nigerian Electricity Supply Industry (NESI) which The Nation obtained in Abuja yesterday.
It would be recalled that the National Assembly had prevailed on the commission to suspend the implementation of the new tariffs.
According to the document, “with the gradual withdrawal of the FGN intervention on tariff support, it is planned that tariffs would gradually be increased to allow the utilities to, in line with the provisions of the EPSRA, recover their efficient cost of operation and a reasonable return on investment while freeing up the subsidy funds for government’s utilisation in other critical sectors of the economy.
“However, the proposed rate increase would only be on the basis of a full understanding of the Performance Improvement Plans being proposed by the companies, with sanctions for failure to deliver on the said plans.
“Noting that the core investors in DisCos are under contractual obligations to reduce the loss levels in the industry, it is expected that tariffs would eventually come down as a result of the efficiency gains and increased energy throughput.
“In order to mitigate the impact of rate shock on consumers, it is proposed that the gradual increase shall commence on April 1, 2020.”
The commission said that the entire market participants in the NESI recorded a total of N1.7trillion tariff-related between 2015 and 2019.