NERC Suspends Increase In Electricity Tariff

March 31, 2020
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Electricity

Electricity

Nigerian Electricity Regulatory Commission (NERC) has suspended plan to increase electricity tariff for end-use customers.

The announcement was made on Tuesday.

NERC said the plan will now wait until July.

NERC had in a December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 disclosed that it would increase tariff from April 1st 2020.

But the increase was described by most stakeholders as one of the most callous decisions in the face epileptic power supply as well as lockdown of economic activities and the many implications of the Corona Virus outbreak.

NERC chairman James Momoh, in an order released on Tuesday, also directed all distribution companies to submit a detailed plan for the attainment of full recovery of prudent costs and allowed return on capital revenue requirements by 30 June 2021.

The revenue recovery and financial sustainability plans shall be submitted to the Commission no later than 21 April 2020. The plans shall include a path, with timelines, for transiting customers to a higher quality of service.

NERC also directed the DisCos to submit revised Performance Improvement Plans based on the key objective of improvement in service for and use customers and transiting to full revenue recovery no later than 21 April 2020.

According to the commission, the approved plans shall form the basis for future tariff reviews and full col recovery.

“All future tariff reviews shall be on the basis of consultations between the Disco and customer clusters with firm commitments on rates and quality of service. The service level compact shall include a compensation mechanism for end-use customers to address the Disco’s failure events to deliver on performance forges.

“All Discos shall be required to disaggregate their respective service areas and/or customers in accordance with the quality of service and supported by the proposal for service reflective tariff classes that shall be graduated by quality of service,” NERC stated in the report.

The regulator further directed all the distribution companies to, no later than 30 June 2020, provide smart meters at 11kV and 33kV feeders level with the capability of sending real-time or near real-time data to the Commission.

“The Federal Government of Nigeria shall provide full support during the transitional period to full revenue recovery ending on June 30, 2021, based on the under-recovery of the revenue requirement determined,” the order stated.

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