Electricity tariff will not be increased in Nigeria with effect from Wednesday as speculated by the Nigerian media including Patmos Media Line.
Hours after the media went to town on Tuesday with the news, The Nigerian Electricity Regulatory Commission (NERC) sent out an order stopping the operation of the increase through a circular no- 198/2020 entitled “ORDER ON THE TRANSMISSION TO COST REFLECTIVE TARIFFS IN NESI”.
NERC insisted “There shall be no increase in tariff of end use customers on April 1, 2020. Performance improvement plan will form the basis for future tariff review”.
It therefore directed operators to submit a performance improvement plan (PIP) committing them to a higher quality service.
NERC had disclosed in its December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 that the order was issued to reflect the impact of changes in the minor review variables in the determination of cost-reflective tariffs and relevant tariff and market shortfalls for 2019 and 2020.
The commission said the order also determined the minimum remittances payable by the distribution companies in meeting their market obligations based on the allowed tariffs.
It said, “The Federal Government’s updated Power Sector Recovery Programme does not envisage an immediate increase in end-user tariffs until April 1, 2020, and a transition to full cost reflectivity by end of 2021.
“In the interim, the Federal Government has committed to funding the revenue gap arising from the difference between cost-reflective tariffs determined by the commission and the actual end-user tariffs payable by customers.”
According to NERC, all Discos are obligated to settle their market invoices in full as adjusted and netted off by applicable tariff shortfall.
It said, “All FGN intervention from the financing plan of the PSRP for funding tariff shortfall shall be applied through NBET and the market operator to ensure 100 per cent settlement of invoices issued by market participants.
“Effectively, this order places a freeze on the tariffs of the TCN and administrative charges until April 2020 at the rates applied in generating MO invoices for the period of January to October 2019.”
- Eniola Olatunji