Stakeholders in the electricity industry have called for the unfreezing of the Multi-Year Tariff Order (MYTO).
They spoke at the maiden edition of the Nigerian Electricity Supply Industry (NESI) Market Participants and Stakeholders’ Roundtable (NMPSR).
The communique was issued yesterday in Abuja by the Central Planning Committee, Chairman Prof. Stephen Ogaji and Central Planning Committee Secretary, Mr. Oyebode Fadipe.
The communique said, “Reopen the MYTO and provide a tariff that incentivizes capacity sustenance and additions, including the move to a combined cycle.”
According to the communique, the stakeholders noted that the current MYTO is outdated after over 10 years and needs a decoupling since enough sector data should have been gathered to improve the assumptions initially made.
The stakeholders urged the Nigerian Electricity Regulatory Commission (NERC) should implement a fair and cost-reflective tariff structure that encourages
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investment, ensures revenue sufficiency, and incentivizes efficient energy consumption.
They insisted that the cost reflective tariff should be treated as an output, not an input.
Electricity Distribution Companies (DisCos), said the communique, should introduce energy efficiency programs and initiatives to encourage customers to adopt energy-saving practices and technologies.
The stakeholders also insisted that DisCos should expand the deployment of smart meters to improve billing accuracy, and revenue collection, and reduce electricity theft.
They also said a full contractual market with capacity payment should be encouraged.
According to the communique, this will enable the replacement of aging capacities as well as support the retention of existing capacities.
It said the “Roundtable identified several key challenges within NESI. These challenges include power generation: privatization, Challenges, and the Way Forward
• Inadequate power generation capacity: Nigeria faces a significant challenge in meeting the growing demand for electricity due to insufficient power generation
capacity, in addition to poor utilization of power generated and stranded generation
capacity.
” Current generation constraints include – gas volume and pressure, transmission, collection/financing, and risk mismatch or misalignment.”
`On gas-to-power: Challenges and the Way Forward, the stakeholders said, “Pricing gas in Naira currency will diminish any incentive to continue domestic gas production. Continuing this path will further increase gas prices until any parity issues are recovered.
“This is because producers will not accept or absorb the currency exchange risk.”