News - January 7, 2021

Nigerians reject hike in electricity tariff by NERC

With the confusion that trailed Tuesday’s reported hike in electricity tariffs by the Nigerian Electricity Regulatory Commission (NERC) yet to abate, a cross-section of Nigerians has voiced their concerns over the decision.
The Edo/Delta branch Manufacturers Association of Nigeria (MAN), which rejected the hike in electricity tariffs, described it as `ill-timed’ due to the current economic recession as a result of the impact of the COVID-19 pandemic.
Chairman of the branch MAN, Okwara Udensi, said in Benin on Wednesday that many businesses were still facing untold hardship caused by the COVID-19 pandemic and EndSARS violence across the country.
Mr Udensi said the manufacturing sector was currently facing the problem of high cost of production in their operations, noting that any further increase in electricity tariff at this time would worsen the production and purchasing power of consumers.

“The economy is in a bad shape. We are in a recession. So, an increase in electricity tariffs at this time will translate to an increase in the cost of goods and services for most Nigerians,” he said.
He said the purchasing power of most Nigerians was low, adding that if people do not buy goods produced at very high cost, it would lead to most small and medium enterprises (SMEs) becoming moribund.
On Tuesday, NERC denied media reports that it had increased the electricity tariff by 50 percent across the country.
In debunking the reports, NERC said it only adjusted its December 2020 Multi-Year Tariff Order (MYTO) and the Minimum Remittance Order by N2 and N4 among categories of consumers.
On the impact on the economy, Mr Udensi said the increase in electricity tariffs would further raise cost of production and urged NERC to put its intention on hold.
All over the world, the MAN leader said the manufacturing industry contributes a greater percentage of GDP to the economy, with a lot of SMEs closed down due to the pandemic, while many workers have been laid off.
What the SMES need now, he said, was government support to grow rather than the increment in electricity tariff.
Meanwhile, another group of Nigerians under the umbrella body called Electricity consumer groups on Wednesday protested against the minor adjustment in electricity tariffs in the country.
The adjustment approved for the 11 electricity distribution companies in the country by NERC was also rejected by the Energy Consumer Rights and Responsibilities Initiative (ECRRI) and the All Electricity Consumers Protection Forum (AECPF) in Lagos.
NERC said the approved minor adjustment in tariffs for electricity users effective January 1, 2021 by N2.00 to N4.00 per kWhr was to reflect the partial impact of inflation and movement in foreign exchange rates.
But, in its reaction National Coordinator, AECPF, Adeola Samuel-Ilori, described the adjustment as illegal, unjust and unfair to electricity consumers in the country.
Mr Samuel-Ilori said the minor adjustment, coming after NERC increased tariffs on September 1, 2020, was in violation of the provisions of Sections 32, 63 and 72 of the Electric Power Sector Reform Act (EPSRA), 2005.
He said the Act provides that any minor tariff adjustment should be done after a period of six months, adding that the review was therefore illegality.
“The DisCos didn’t fulfill the conditions precedent in Section 76(2)(b) and (7) of EPSRA 2005 to the increase in the September 1, 2020 tariff in the first place.
“Such condition precedent includes wide consultation with stakeholders and noticeable efficiency.
“The other issues have to do with metering and directive on capping which repealed estimated billing methodology in order 197/2020 which is still subsisting.
“Our position is that we are examining the situation because it is a legal issue and we may need to go to court for interpretation if they go ahead with the adjustment,” Samuel-Ilori said.
Also, the National President, ECRRI, Sural Fadairo, said the minor adjustment was not necessary at this point in time.
He said NERC was duty-bound to protect electricity consumers from exploitation.
However, he said what the people are witnessing now was clearly the opposite, with adjustment in tariffs within a very short period.
“We are therefore calling on the National Assembly to urgently intervene and halt this minor review for now,” Mr Fadairo said.

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

TCN recovers national grid; restores normal supply nationwide

The Transmission Company of Nigeria (TCN) on Thursday said it has successfully recovered t…