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Business Nigeria: Power Firms Demand 200% Increase in Electricity Tariff



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Citing several reasons, power firms in Nigeria have started demanding a 200% increase in electricity tariff.

CEO of the Association of Nigerian Electricity Distributors, an umbrella body for Discos, Mr. Azu Obiaya, said Nigeria needs to increase the electricity tariff in order for the Discos to serve well.

Each Disco has a fixed energy charge payable by its customers. The highest charge according to a NERC document for the year 2016, is N32.26/KWH which is paid by R2 consumers under the Jos Electricity Distribution Company.

The lowest energy charge is N15.83/KWH, paid by R2 customers of the Ikeja Electricity Distribution Company. The average energy charge for all 11 Discos is N22.8/KWH.

However, the Discos are not happy with the current rate. They say it is not cost reflective and hampers the required expansion of infrastructure as well as the smooth flow of operations.

“To review the tariff, we will be looking at an average rate of N70 per kilowatt-hour for residential consumers. But some Discos will like to have the rate as high as N105/kWh.” Mr. Obiaya said.

One reason many Discos had not metered their customers was due to the huge debts owed them, as well as the tariff issue, he said.

In addition to this, the Discos are owed debts by private homes, businesses and government ministries, departments and agencies post-privatisation of N568bn.

“Discos are experiencing revenue shortfall on a monthly basis of N38bn. As of June 2016, the MDAs owed the Discos N53bn post-privatisation.

“The books of the Discos are so bad that they have no chance anymore to access finance. These books do not reflect the cash flow that is necessary for them to be taken seriously by any lender.”

A senior official at NERC confirmed that the Discos had been agitating for an upward review in tariff, but NERC had not considered their demand.

The National Secretary, National Electricity Consumers Advocacy Network, Mr. Obong Eko, added that NECAN would never support such move.



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