Federal Government and NERC approved new Electricity Tariffs – DisCos


By Mordi Chukwunonso

Electricity Distribution Companies (DisCos) insists that the new tariffs were approved by the Federal Government and NERC. This is in response to the alleged attempt by NERC to dissociate itself and the federal government from the July 1 commencement of new electricity-tariff regime.

The DisCos added that they were shocked to receive a letter from NERC ordering them not to mention the Federal Government and the regulatory body when informing customers on the commencement of the new tariffs. The power distributors with the support of the Association of Nigerian Electricity Distributors (ANED) stated that it was unacceptable and wrong for NERC to demand that neither the Federal Government nor the NERC should be mentioned in their notifications to customers on the increase.

In a statement issued by the ANED Executive Director in charge of Research and Advocacy, Mr Sunday Oduntan on the 28 June 2020, he noted that in a controlled sector, the DisCos cannot take a decision about an important aspect of the sector like Tariff without a go ahead from NERC so they were surprised with the letter of warning from NERC.

“What has happened in recent days is that our regulator is warning us not to mention their name or the Federal Government in any of our communication about the Tariff increase with our customers. This is certainly very unfair.

“Many stakeholders have expressed their concern at the unusual silence of our regulator, (NERC) on the upcoming increase and it looks like a unilateral decision by the DisCos.

“We will like to inform Nigerians that tariff review (upward or downwards) is the primary responsibility of NERC as our regulator. We are required to submit our proposals and they have the final say,’’ the DisCos said.  

The power distribution firms added that while it is their obligation to communicate the increase, it is also important for customers to know that it is following standard processes of tariff adjustments in the sector with approvals from NERC and the Federal Government.

“As DisCos, we believe in the rule of law. We will only carry out lawful approval and instructions by our regulator. The proposed increase and the timing of the increase in tariffs were done by NERC. It is their statutory responsibility. DisCos alone cannot fix and approve electricity tariffs. We are very sensitive to the feelings and yearnings of our customers during this period of COVID-19.”

The DisCos said, in collaboration with the National Assembly, their proposal which suggested a two month free electricity supply for residential customers, was to cushion the effects of the pandemic on Nigerians even though unfortunately,  it was not granted by the Federal Government due to lack of funds.

“The fact that the action is deliberately made to look unilateral is capable of creating public resistance, effectively setting DisCos up to fail,” the DisCos stated.

All DisCos had started sharing the news of the new tariff regime which is slated to kick-start on Wednesday, July 1 since last week.

“The communication was to enlighten customers about the details of the ‘service-based’ tariff hike to ensure customers were fully aware about how it concerned to them and the supply band they fall under. The truth is that we are the public-facing arm of the sector, but what we collect is shared by everybody, including NERC.

Our interest is in the nurturing of a commercially viable power sector. Political considerations and bickering will certainly not take us there,’’ the DisCos said.

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