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Tag: electricity tariff

  • New electricity tariff violate UN rulings – SERAP

    The Socio-Economic Rights and Accountability Project (SERAP) said on Tuesday that the increase in electricity tariff violated ‎two United Nations (UN) special rapporteurs rulings delivered in November 2013.

    SERAP backed Monday’s nationwide protest by the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) against the increase in electricity tariff and demanded an immediate reversal of the hike.

    It ‎ ‎advised the Minister of Power, Mr. Babatunde Fashola to ensure that regulatory authorities are not allowed to get away with 45 percent increase in electricity tariff by promoting compliance with the 2013 UN rulings.

    ‎SERAP, in a statement signed by its executive director, Adetokunbo Mumuni said, “Nigeria being is an important member of the UN and had voluntarily accepted its Charter and treaties. Therefore, any effort to increase electricity tariff should be guided by the recommendations by the UN and dialogue with organised labour and other stakeholders.”

    The organisation recalled that the UN published a joint letter of concern sent to former President Goodluck Jonathan in which they expressed concerns that access to electricity (and regularity of supply) is a problem in Nigeria and had then raised eight questions for the government to answer within 60 days.

    The letter, reference No NGA 5/2013,‎ dated November 26, 2013, and signed by two special rapporteurs expressed concerns that “at the end of 2012, Nigeria with a population of about 160 million people only generated about 4,000 megawatts of electricity, which is 10 times less than some other countries in the region with less population.”

     

     

  • New electricity tariff: Lawyer asks court to charge NERC, DISCOs for contempt

    New electricity tariff: Lawyer asks court to charge NERC, DISCOs for contempt

    A human rights lawyer, Bar. Toluwani Yemi-Adebiyi has approached the Federal High Court to charge the management of the electricity distribution companies (DISCOs) and the Nigeria Electricity Regulatory Commission (NERC) for contempt of court.

    Justifying the need for the court action against the plaintiffs, Yemi-Adebiyi said the legal implication of NERC and DISCO defiance is contemptuous of the court.

    Expatiating, he said: “The power sector has illogically taken the bull by the horn by contemptuously increasing the electricity tariff, in spite of the subsisting Order of Court not to bring any Increment until the Substantive Suit is determined.”

    He also recalled that in spite of the legislative chambers insistence, that such decision should be suspended until the probe of their unfair Trade practices is concluded.

    In spite of failure to provide meters to consumers, thus giving them the room to bring outrageous estimated bill to their own gain, but to the detriment of the already exploited consumers who are not getting value for what they pay for.

    In spite of procedural irregularities at Variance with the statutory requirements for Increasing Tariff which emphasised on efficiency as a vital pre-requisite for Discos to recover full cost of its business activities.

    Raising a poser, he queried, “Is the power sector efficient? Rising and falling, dwindling and hovering around 4,000MW in spite of $20billion invested in the past 10yrs, with consumers paying for darkness and gross darkness, yet not getting value for what they are paying for.”

    Besides, he said, “Profit making by the private investors should not be at the exploitative detriment of the already exploited consumers.”

    The activist lawyer who said the plaintiffs were guilty as charged. “Form 48, Notice of disobedience of Court Order had been filed. Filing of Form 49 in Conjunction with Order 35 of the Federal High Court will follow thereafter,” he said.

    It may be recalled that Yemi-Adebiyi who had taken the NERC to court got an order by the Federal High Court in Lagos to stop it from further increasing its tariff, said the injunction granted by Justice Ibrahim Idris against any increment was subsisting and had not been discharged.

  • New electricity tariff takes off February 1

    New electricity tariff takes off February 1

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    The Nigerian Electricity Regulatory Commission on Wednesday said the take off date of the new electricity tariff (MYTO 2015) remains February 1.

    In a statement made available to journalists in Abuja, NERC said it has told distribution companies to abide by its directive not to connect new customers without first providing them with meters.

    “We wish to state that at no time did the commission change the date for the take off of the new tariff,” NERC said.

    The acting Head of the commission Dr. Anthony Akah, said the removal of fixed charge under the new tariff regime “was in response to electricity consumers’ complaints and a measure to ensure electricity distribution companies improve on service delivery as their income is dependent on the quantity of electricity used by their customers.”

    Akah said NERC will continue to engage stakeholders including members of the National Assembly to address their concerns on the new tariff regime.

    “NERC holds National Assembly in high esteem and we are sure that both institutions are working to ensure that the National and consumer interests are protected,” he added.

     

  • Lawyer, NERC square up over new electricity tariff

    Lawyer, NERC square up over new electricity tariff

    The Dr. Sam Amadi-led management of the Nigerian Electricity Regulatory Commission (NERC) is alleged to have breached a subsisting court order which compelled the former to discountenance electricity tariff in the interim pending the adjudication of the case before the Federal High Court in Lagos.

    Toluwani Adebiyi, a lawyer particularly faulted the new electricity tariff declared by NERC, saying it is contemptuous of court.

    Adebiyi who had taken the NERC to court got an order by the Federal High Court in Lagos to stop commission from further increasing its tariff, said the injunction granted by Justice Ibrahim Idris against any increment was subsisting and had not been discharged.

    Adebiyi, who filed the suit, in a letter to Minister of Power Babatunde Fashola (SAN), said it was unfortunate that an order of court would be violated under a democratic dispensation.

    Justice Idris had made the order on May 28 restraining NERC from increasing tariff in June. The judge later restated the order, saying it subsists until the substantive matter is decided.

    “It becomes very sad, frightening and legally embarrassing when such flagrant disregard happens not in a military era, but in a democratic dispensation,” Adebiyi said.

    He said it was even more unfortunate because NERC chairman Dr Sam Amadi; Fashola and Vice-President Yemi Osinbajo (SAN) are lawyers and should know better than to approve a tariff when an order was subsisting.

    The lawyer said he would initiate contempt proceedings should the new tariff be implemented in spite of the order.

    Adebiyi who scorned NERC’s argument that fixed charge is universal and as such, should be to service permanent investments like cables, poles, transformers, etc, said, such can only work if the electricity consuming public enjoy 24hrs light as supplied by those countries, the initiators of the fixed charge. “Till date, communities are still providing poles, cables and transformers for their own use. Thank God the fraudulent fixed charge is now abolished,” he said.

    The lawyer also argued that the non-availability of meters is intentional, as it allows the DISCOS to get anything they want through the outrageous estimated billings, despite the N2.9b metering subsidy made available for this purpose by the federal government.

    The NERC had in a statement last week announced that it will jack up energy tarrif, while assuring that electricity consumers will only pay for what they consume from month to month.

    Speaking on the new tariff, the NERC boss said: “The objective of the new tariff is to enable prudent consumers to save money on electricity bill as they can now control their consumption and not pay monthly fixed charges.”

    Specifically, he said: “For instance, residential customer classification (R2) in Abuja Electricity Distribution Company will no longer pay N702.00 fixed charge every month. Their energy charge will increase by N9.60. Also, residential customers (R2 customers) in Eko and Ikeja electricity distribution areas will no longer pay N750. 00 fixed charges. They will be getting N10 and N8 increase respectively in their energy charges. Similarly, the burden of N800.00 and N750.00 fixed charges would be lifted off the shoulders of Kaduna and Benin electricity consumers. These consumers will see an increase of N11.05 and N9.26 respectively in their energy charges.”

  • Pay-as-you-use electricity tariff takes off, says NERC

    Pay-as-you-use electricity tariff takes off, says NERC

    The new electricity tariff regime approved over the weekend by the Nigerian Electricity Regulatory Commission (NERC) has removed fixed charges for all classes of electricity consumers.

    Electricity distribution companies will from the next billing period no longer charge their customers monthly fixed charges.

    A fixed charge is that component of the tariff that commits electricity consumers to paying an approved amount of money, not minding whether electricity is consumed during the billing period or not.

    The commission yesterday broke the news in a statement issued in Abuja.

    According to the statement, under the new tariff regime, electricity consumers will now pay only for what they consume from month to month. NERC Chairman/CEO Dr. Sam Amadi said: “This is good news for electricity consumers who have long asked for a more just and fair pricing of electricity. The regulatory commission had promised to address all the complaints against fixed charges through a regulatory process that promotes investments in the electricity industry without unfairly burdening electricity consumers. This is in line with NERC’s mandate to be fair in all its regulatory interventions.”

    Although the new tariff regime comes with an increase in energy charges, all electricity consumers (residential as well as commercial) will no longer pay fixed charges, so their total bills will depend on the electricity they actually consume.

    Consumers will no longer be spending money every month to pay for fixed charges even when they do not receive electricity in their homes and business.

    According to the NERC chief, “the objective of the new tariff is to enable prudent consumers to save money on electricity bill as they can now control their consumption and not pay monthly fixed charges”.

    For instance, residential customer classification (R2) in Abuja Electricity Distribution Company will no longer pay N702.00 fixed charge every month. Their energy charge will increase by N9.60. Also, residential customers (R2 customers) in Eko and Ikeja electricity distribution areas will no longer pay N750. 00 fixed charges. They will be getting N10 and N8 increase in their energy charges. Similarly, the burden of N800.00 and N750.00 fixed charges would be lifted off the shoulders of Kaduna and Benin electricity consumers. These consumers will see an increase of N11.05 and N9.26 in their energy charges.

    The new tariff is also good news for commercial consumers.  For example, commercial customers’ classification C2 in Ibadan and Enugu will no longer pay fixed charges of N17, 010. 00 and N22, 141. 00. Their energy charge will increase by N12.08 and N13.35.

    In line with the transparent disposition to its operations, full details of the new tariff regime would be advertised in major national dailies and the Commission’s website within the next 24 hours.

    Besides this cost saving element, the new tariff regime comes with renewed commitments by the electricity distribution companies (discos) to rapidly improve supply. These commitments are contained in service level agreements, which are based on the performance level agreements submitted by the new owners during the bid process. The tariff order also encourages the distribution companies to develop new sources of supply within their franchises to increase the quantity and quality of supply to target customers on a willing buyer willing seller basis. These measures are necessary to improve electricity supply across Nigeria and ensure that the distribution companies are working hard to increase investment that will ensure predictable and ultimately reliable and uninterrupted electricity supply.

    Henceforth every disco should meter all its customers. The metering policy will be strictly enforced. For those willing electricity customers who paid for meters under the Cash Advance Payment Metering Initiative (CAPMI) but are yet to be metered within the allowable 60 days, they would no longer be billed under the new tariff regime. The discos will not disconnect them. There is zero tolerance for overbilling of customers. An unmetered customer who is disputing his estimated bill would not be expected to pay the disputed bill. He would pay his last undisputed bill as the contested bill goes through the dispute resolution process. This is a departure from the old practice which prescribes that customers should first settle the bill while dispute resolution is in process.

    No electricity distribution company is allowed to connect new customers without metering the customer first. This is to close the wide metering gap of over 50 per cent and reduce high incidence of collection losses in the Nigeria Electricity Supply Industry (NESI).

    The Commission said: “The new tariff regime is the result of a transparent, rigorous and credible rate review process. The tariffs will lead to greater reliability in the provision of electricity. More people will progressively have access to the grid, more meters will be deployed and the need for self generation would be gradually reduced.”

    The Commission expects the electricity distribution companies to provide better customer service in all aspects of their operations and would hold the electricity distribution companies responsible for their service level agreements.

     

  • Group kicks against proposed increase in electricity tariff

    Group kicks against proposed increase in electricity tariff

    A group, Citizens Access to Electricity Initiatives (CATEIN), on Tuesday kicked against planned increase in electricity tariff by the Nigeria Electricity Regulatory Commission (NERC).

    Mr Abdul-Salam Fashola, the Chairman of CATEIN told the News Agency of Nigeria (NAN) in Lagos that there were lots of issues to be addressed before tariff adjustment.

    He said that Distribution Companies (DISCOs) did not have complete data of their consumers.

    “Nigeria Electricity Regulatory Commission (NERC) should shelve the idea of increment first and address fundamental issues in power sector.

    “The investors in power sector should find a way to ensure they have proper data of their consumers.

    “There are lots of consumers that are enjoying power supply without paying a single kobo into their account because they are not captured.

    “Some pay regularly into their staff pocket, while many are tapping their energy to do their businesses without hindrance.

    “Many consumers refused to pay monthly bill because the bill is outrageous, some owe close to N250, 000 alone and DISCOs insisted that they have to pay all.

    “There is lots of injustice done by these people; a consumer travelled out of the country came back six months later, only to meet bills of N100, 000 without consuming power supply, how do you expect him to pay.

    “There are lots of bad or faulty transformers everywhere, overloaded cables and load shedding here and there. Some consumers in Ibafo and Mowe in Ogun State have not been connected to their system.

    “Many consumers are still battling with their analogue meter, some two years after NERC has commanded DISCOs to install them with free prepaid meters,” he said.

    He urged the DISCOs to address all these challenges before the idea of tariff could be raised.
    “We in CATEIN say no tariff adjustment until all these fundamental issues are addressed and consumers are enjoying regular power supply nationwide.

    “Put smile on the faces of your consumers before tariff adjustment because life is hard now,” he said.

    NAN recalls that Mr. Babatunde Raji Fashola (SAN), the Minister of Power, Works and Housing, at a news conference in Abuja on Dec. 8, said that electricity tariff will slightly go up.

    Fashola, however, said that the government would meet with the Nigeria Electricity Regulatory Commission (NERC) to ensure that consumers and investors were not cheated.

     

  • NERC to release new adjusted electricity rate

    NERC to release new adjusted electricity rate

    The Nigerian Electricity Regulatory Commission (NERC) at the weekend said that after duly considering the various individual electricity tariff submissions of the 11 electricity distribution companies (Discos) in Nigeria’s electricity market, the new tariffs will be ready and signed off for use this week.

    Though technical details of the new tariff structure have been finalized by the regulator, NERC said at a workshop in Abuja that a final regulatory meeting would be held in the week to conclude the process and then sign it off.

    Speaking, its Chairman , Dr. Sam Amadi said the regulator had held meetings with Discos to finalise on their respective tariff proposals.
    He said that the commission had gotten feedbacks from both government the Discos and would now conclude the process.

    He said : “We have gone to the Discos, gotten feedback, gone to government and gotten feedback. We have not finalised. In our view, we have basically done the crunching of numbers.

    “It is not about tariff increase, it is also not about their financial outlaw. We have done the technical work, remaining the regulatory work. By next week, we should sign off on the new tariff.”

    Amadi’s disclosure follows that of Minister of Power, Works and Housing, Babatunde Fashola who last week announced that NERC and the 11 Discos had been directed to meet and come up with what he described as a ‘fair market tariff’

    Fashola had said that the new tariff was key to reliable electricity supply in the country and thus appealed to consumers to accommodate the incoming increase with some benefit of doubts on the government’s sincerity to enthrone a fair tariff regime in the sector.

    He pointed out that a good tariff system guarantees good power supply and drew close analogy to what happened in the country’s telecoms sector when it was privatised in 1999. Fashola stressed that the sector will eventually plateau to allow supply and tariffs gain commercial values.

    He had said: “Without a tariff system, there will be no power. A fair market tariff is expected to be announced by the regulator after meeting with the distribution companies. When the new tariff comes, please conserve light. We must pay for what we consumer whether we like it or not.”

    He also noted that the Discos must commit to certain key performance conditions in the area of providing prepaid meters; expansion of network, among others, in line with the proposed new tariff order.

    NERC also noted that the revenue shortfall that accumulated with its freezing of the Residential 2 (R2) class tariff earlier in the year when it approved a cost-reflective tariff in the Multi Year Tariff Order 2.1 (MYTO) would be incorporated in the new tariff to enable the operators recover their cost of supplies to consumers.

    One of its tariffs and rates officials, Aisha Mahmoud in her presentation disclosed this. She said: “We calculated the shortfall accruing to the freeze of the R2 and we incorporated it in the tariff because that’s part of the revenue of the operators and they have to recover it one way or the other.”

    “So, the Discos have now included it because we said it is their tariff. So, it is part of the tariff going forward,” Mahmoud added.

    Similarly, Amadi disclosed that the commission has would soon begin verification of accumulated debts owed to Discos by government’s Ministries, Departments and Agencies (MDAs) as well as military and police barracks, amongst other security formations.

    According to the Discos, the debts owed for supply of electricity to these classes of consumers have overtime risen to now impact their operations.

    Amadi said on this: “The last government through the SGF gave some instructions directing that the Accountant General’s office should be deducting at source when we wrote and complained about huge debts.

    “Since then that has not effectively been implemented. But right now in the new tariff we have discounted those MDA debt from their collection losses with the commitment that it will be paid and government is working on that.”

    “And the last time we were at the National Assembly, we proposed to the House of Reps a strategy that could in the future prevent any future accumulation of debt from government agencies.

    “We said they should adopt the earmark strategy in the US, which means each MDAs budget should have clear earmark for paying electricity bills and those earmarks means you put in conditions that the money cannot be used for something else, if used for another thing it would mean a violation of the law.

    “Also as part of oversight function, the National Assembly can now demand for certificate of compliance to be sure they have paid the bills. Each of the Discos have sent us how much they are being owed, a verification will be done to ascertain the bills and NERC will present a plan of paying the debt,” he said.

    Meanwhile, the Presidency has intervened in the lingering dispute between Geometric Power and Enugu Electricity Distribution Company over the lease agreement granted to the 141 megawatts (MW) Aba Power Plant.

    Amadi in his response to a question on the state of NERC’s intervention in the issue, said that NERC has developed a settlement plan which the Presidency was reviewing for adoption.

    He said the Vice President, Prof. Yemi Osibanjo has had a meeting with the parties preparatory to eventual resolution of the issue, adding that a win-win resolution of the issue is expected soon.

    “I have been mandated to draw out a settlement plan. We have done that and completed it. It is now at the VP’s office. NERC’s framework is to be adopted and reviewed as an out of court.

    “It is about recognising Enugo Disco as the landlord and Geometric as the lease holder. As their schedule allows them, they will call for the final meeting. It will be a win-win,” he said.

    Geometric which operates the 141MW Aba Power, was founded by former Minister of Power, Prof Barth Nnaji.

    The company is presently at loggerheads with the Bureau for Public Enterprises (BPE), which sold the Aba and Ariaria Business Districts of the Enugu Electricity Distribution network to Interstate (new owners of Enugu Electricity Distribution Company) in spite of a 2005 deal that ring-fenced and concessioned the units to Geometric to feed its power directly to.

  • Protesters block Lagos Assembly over abnormal electricity tariff

    Protesters block Lagos Assembly over abnormal electricity tariff

    Scores of residents marched on the Lagos State House of Assembly yesterday.

    They blocked the two entrances for hours.

    The protesters carried lanterns and placards to protest against the Ikeja Electricity Distribution Company (IKEDC).

    Under the auspices of Youth Alliance for better Nigeria, they lamented that every month they pay huge electricity bills when they hardly ever get power supply.

    Some of the placards read: “Outrageous bill, oppressive conduct of staff”; “Fashola save Nigerians from darkness”; “Enough exploitation of 10 streets on a transformer” ; “We need prepaid metres”; “Frustration of government effort to provide employment by not improving the epileptic power supply”; “IKEDC should stop substandard prepaid metres “and “If you cannot serve us, you should not exploit us”.

    The protesters were angry that no lawmaker came to address them.

    They blocked the road leading to the Governor’s Office.

    The protesters lamented that some areas in Alimosho have not had power supply for months.

    Their leader, Moruf Adegoke Niniola, said this was not the first time of protesting against IKEDC.

    According to him, a delegation had met with the government, which set up a committee.

    He, however, said some top management staff of IKEDC frustrated the move for an amicable solution.

    “As I am talking to you, the committee is not sitting anymore.

    “The last sitting was on  October 2. Abule-Odu in Alimosho has not had power supply in more than three months.

    “The IKEDC supplied pre-paid metres to customers but they have not been working.

    “The company has resorted to coded billing system or what you call estimated billing,” he said.

    Addressing the protesters after yesterday’s sitting, the Majority Leader, Sanai Agunbiade, who spoke on behalf of the Speaker, Mudashiru Obasa, told the protesters that the struggle was a genuine move to ameliorate the plight of Nigerians.

    Advising the protesters to make the fight a collective one, Agunbiade said: “The struggle is not meant for those who are here alone, it is a struggle for everybody.

    “I do not want you to isolate your struggle. The moment some people in the struggle negate the belief, you can’t achieve the purpose.”

     

     

     

  • Electricity tariffs cannot remain at current level – Osinbajo

    Electricity tariffs cannot remain at current level – Osinbajo

    Until there is stability in the power sector, electricity tariffs cannot remain at the levels they are currently, according to Vice President Prof. Yemi Osinbajo, SAN.

    Speaking Thursday afternoon at the Annual General Meeting of the Manufacturers Association of Nigeria, MAN, the Vice President who represented President Muhammadu Buhari as the Special Guest of Honor said truth of the matter regarding electricity tariffs is that “at this point, if we wanted to have a cost effective tariff, the only way is to service that core value chain, the only way is to ensure that we are paying and compensating the value chain -from generation down to distribution- a cost effective tariff.”

    In a similar vein, the Vice President also made it clear at the meeting that a review of the CBN restrictions on foreign currency is not imminent.

    His words:  “I want to make it absolutely clear that the position is not that a review of the CBN restrictions on foreign exchange is imminent. It is a short term measure, not a policy, and as things improve, we will have a discussion about what to do. But certainly not that a review is about to take place.”

    Osinbajo spoke further on the electricity tariffs:

    “Power is of course crucial and as the president said in his inaugural address, to which President Mbeki referred, the question of power is one that is absolutely crucial to manufacturing and practically everything else and we shouldn’t be rejoicing at 4000 Megawatts of power. But the problems are historical and several of those problems will need tackling head on, on a day-by-day basis.

    “One aspect of the problem that i want to speak about, because this also affects manufacturing, is the whole idea of the tariffs. Of course the president of MAN just said that we have one of the most expensive electricity in the world.

    “Now, the truth of the matter is that at this point, if we wanted to have a cost effective tariff, the only way is to service that core value chain, the only way is to ensure that we are paying and compensating the value chain -from generation down to distribution- a cost effective tariff.

    You cannot have that cost effective tariff without some pay.  At the moment, (when you compare) how much it costs to produce power, and the amount of power that is generated, the losses on account of distribution are significant. In some cases you have up to 40% losses in distribution, and of course it is the DisCos that have to take that burden.

    The GenCos (generating companies) are producing power but they expect to be paid for all the power that they produce. Now, if 40% of this is lost, it means the DisCos cannot collect 40%, but they have to pay for it somehow. So government has to come in and play some kind of role in order to ensure that the whole value chain is paid for.

    “But the most important thing is that the cost of power is reflective of costs that have to be borrowed at every stage of the value chain and today the cost of power, if it’s going to be reflective in any way is simply what it is. It will be very difficult indeed, except if we are going introduce yet another subsidy and by the way, a fair amount of that goes on already in the way that government supports the GenCos and the DisCos.

    “But i think that we must be ready to accept that for a while, until things stabilize somewhat, tariffs cannot remain at the levels at which they are today, they cannot remain at that level, and that just simply is the truth of the matter.

    “It certainly means that there may be higher costs, but I don’t think that a option of not having power is really what we want. The real issue of course is that at the end of the day, some of the cost goes to the consumer, but a cost reflective tariff is an absolute necessity, otherwise, privatization and all of that simply doesn’t make sense.”

     

  • Reps kick against electricity tariff increase

    Reps kick against electricity tariff increase

    • NERC boss summoned

    The House of Representatives has urged the management of the National Electricity Regulatory Commission (NERC) to stop electricity Distribution Companies (DISCOs) from the planned upward review of electricity tariff.

    NERC has also been asked to appear before a House panel to explain the justification for the planned review and how Nigerians would not be negatively affected.

    Furthermore, to ensure that Nigerians get value for their money, the lawmakers have also directed NERC and DISCOs to immediately begin the provision and installation of prepaid meters to every consumer nationwide.

    The decision of the lawmakers followed the adoption of a motion by Solomon Maren (PDP, Plateau), who regretted that as a consequence of the comatose power generation and distribution system, many industries have collapsed.

    Besides, the House resolved against further collection of flat  maintenance or service fees by the DISCOs which were termed illegal and not in tandem with best practices.

    “It should be of concern that the NERC has directed all the DISCOs to comply with the directive for upward review of tariff  because there are attempts by the DISCOs to devise another way of collecting these monies under another guise.