NERC to Release New Electricity Tariffs by End of October

NERC Chairman, Dr. Sam Amadi

The Nigerian Electricity Regulatory Commission (NERC) has said the new electricity tariffs proposed by the distribution companies for approval by the regulatory agency would be ready for implementation by the end of October.

The agency at its recent public consultation where the proposed new retail electricity rates were jointly reviewed by stakeholders, explained that it would first review the figures presented by the Discos, taking into consideration the diverse views of consumer groups, who were at the consultation before approving any rates.

Its chairman, Dr. Sam Amadi however noted that the new rates would be out and subsequently practical in the sector by the end of October.

Amadi further stated that from the end of October, the country’s electricity sector is expected to operate with new sets of tariff which is considered cost-reflective and capable of attracting investments in the sector.

“The new tariff is expected by the end of the month but we may skip our timeline to be able to do more thorough work. For example, we have to go to Kaduna and find out the numbers but essentially, our target is the end of the month,” Amadi said.

While reiterating the federal government’s reported stance on the tariff review, Amadi further said: “The policy for government is that we need a tariff that encourages investment. Ultimately, whatever they send to us, we are not going to give them a back of the envelop tariff. They have to satisfy all expected regulatory standards.

“The regulator does not allow people to recover more than what they are supposed to recover.”

He equally noted that the diverse views presented by consumers at the consultations would be considered in the final priming of the rates, adding that the commission would remain impartial in its approval of rates for use by the Discos.

“The views of consumers have been tremendous, if you recall, the issue of fixed charge, CAPMI and penalising Discos came from consultation.

“If you look back, you will see that we have always factored the views of consumers and this does not mean that whatever the consumers tell us becomes law but it helps us to do more research and find out what the problems are.

Of course, public consultation has huge impacts on what we finally do but as always, it must be balanced and evidenced with good practice,” Amadi noted.

Speaking further, he explained that: “NERC can guarantee that the process we are undertaking is not just a ritual or hollow routine. This is a real search for a tariff regime that will enable investors recover their prudent costs and at the same time provide strong incentives for quality service for consumers.”

He disclosed that the regulator will in every tariff framework it approves for the Discos, include enforceable ‘service level agreements’, and that any Disco that fails to the meet up with the agreement will lose its rights to such approved tariff.

Accordingly, the submissions made by the Discos showed that they had proposed sweeping increase in their current charges to consumers. For example, Abuja Disco with its current averag