The Nation Newspaper

Tag: NERC

  • MAN faults NERC’s tariff model

    MAN faults NERC’s tariff model

    • ‘It ‘ll raise production cost’

    THE Manufacturers Association of Nigeria (MAN) has faulted the Nigerian Electricity Regulatory Commission’s (NERC’s) Multi-Year Tariff Order (MYTO), especially the fixed charges.

    Its President, Dr Frank Udemba Jacobs, told The Nation in Lagos, that with the poor supply of electricity, there would be  an increase in the cost of production of manufacturers and this would translate to higher prices of goods.

    He said: “The issue of electricity supply is of great concern to MAN considering that it has been a major challenge to the sector. MAN has contested the various Multi-Year Tariff Orders of the Nigerian Electricity Regulatory Commission (NERC) and demanded that fixed charges be removed. We hope and believe that we will achieve it.”

    He explained that the initial analysis made by MAN showed that the removal of fixed charges and the recent increase in tariff under the proposed new tariff order (MYTO 2.3),  will raise the cost of electricity and that of the cost of production.

    The MAN chief argued that the increase in tariff would not be supported with increased electricity supply, and that manufacturers would still depend on self- generation of electricity.

    He urged the government to be interested on how to grow the economy through a robust policy that will make the operating environment conducive to local manufacturers.

    According to him, the manufacturing sector is a huge job creating sector and should be supported instead of stifling them through unhealthy policies which indirectly affect the importers of finished products.

    He however said there is a pending litigation against the increase in tariff by MAN against NERC, adding that any proposed increase affecting MAN members will be subjudice.

    On the foreign exchange (forex) policy of the Federal Government, he claimed the policy adversely affected the manufacturing sector as productivity in the sector contracted greatly last year.

    He, however, praised what he called some noticeable modifications in the various presentations and recommendations by MAN.

    He said the challenges felt in the economy might not be unconnected with the crash of crude oil prices in the international market, adding that as the forex situation improves, further modification of the policy should be undertaken.

    On the discontinuance of allocating forex to Bureau de Change (BDCs), Jacobs asked that it should rather be dedicated to support the importation of raw materials and machinery that are not available locally to grow the manufacturing sector.

  • New electricity tariff takes off February 1

    New electricity tariff takes off February 1

      Facebook  Google+  LinkedIn

    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.”

  • Eko Disco lauds NERC over new electricity tariff

    The Eko Electricity Distribution Company (EKDC) on Thursday commended the Nigerian Electricity Regulatory Commission (NERC) on the new tariff regime.

    Mr Godwin Idemudia, the Corporate Communications Manager in EKDC, gave the commendation in an interview with the News Agency of Nigeria (NAN) in Lagos.

    He was reacting to the removal of fixed charges under the new tariff regime introduced recently by the NERC.

    According to him, removal of fixed charges by government is a welcome development which will benefit the customers a great deal.

    Idemudia said that his company would now redouble its efforts on its metering project.

    He said that the company had the least charges among the operators going by what NERC had just released.

    “What it means now is that we are going to pursue vigorously our metering rollout plans to meet the yearnings of customers.

    “But for those who cannot wait for the rollout plan to get to them, they can key into our Credited Advanced Payment Metering Implementation (CAPMI) programme to avoid estimated bills which do not favour the company nor the customers.”

    Idemudia said that his company’s recent arrangement with Egbin for supply of 100 mega watts was still in place.

    “Customers within Lekki, Ajah, Ibeju and environs will benefit greatly from this special plan.

    “This is energy that will come directly to us without passing through the national grid.

    “In this special arrangement, the customers will pay slightly more than regular customers.

    “The good news is that it would be stable almost at all times,” Idemudia explained.

    He said that the company had put in place special fault clearing teams to respond to faults during the Christmas and New Year period for faults to be attended to within a very short time of distress calls.

    “Our equipment have been serviced to take any amount of energy that may be wheeled to us by the generation companies via transmission.

    “While we wish our our customers the very best this season, we appeal to them to pay their bills regularly and also make use of our customer care helplines whenever they need our services.

    NAN recalls that the NERC, on Dec 21, outlined various rates of increase in energy charges for consumers across the country.

    It announced the removal of fixed charges for all classes of electricity consumers so that power users would only pay for what they consumed.

    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.

    Under the new arrangement, residential customer classification (R2) in Abuja Electricity Distribution Company will no longer pay N702 fixed charge every month.

    Their energy charge will, however, increase by N9.60.

    Also, residential customers (R2 customers) in Eko and Ikeja Electricity Distribution zones will no longer pay the N750 fixed charge.

    They will, however, be paying additional N10 and N8, respectively, in their energy charges.

  • ‘NERC flouted court order on electricity tariff’

    The new electricity tariff regime approved by the Nigerian Electricity Regulatory Commission (NERC) flouted an order by the Federal High Court in Lagos, the plaintiff, Toluwani Adebiyi, has said.

    He 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 in a democracy.

    Justice Idris 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.

    NERC has said as from the next billing period, distribution companies would no longer charge their customers monthly fixed charges.

    “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 despite of the order.

    “We will not hesitate to bring contempt charge against whosoever acts contemptuously against the subsisting order of court. In fact the forms 48 and 49 are already prepared against would-be defaulters,” he said.

  • 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.

     

  • NERC approves new electricity tariff, abolishes fixed charges

    NERC approves new electricity tariff, abolishes fixed charges

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

    This is contained in a statement on the company’s website, signed by its Head, Public Affairs Department, Dr Usman Abba Arabi.

    It said from the next billing period, distribution companies would no longer charge their customers monthly fixed charges.

    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.

    Under the new tariff regime, electricity consumers will now only pay for what they consume from month to month.

    According to the Chairman of NERC, Dr Sam Amadi: “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 and commercial) will no longer pay fixed charges.

    “Their total bills will depend on the electricity they actually consume and may be reduced when they conserve electricity.”

    The statement said that consumers would no longer spend money every month to pay for fixed charges even when they did not receive electricity in their homes and business.

    “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 fixed charge every month.

    Their energy charge will increase by N9.60kwh.

    Also, residential customers (R2 customers) in Eko and Ikeja electricity distribution areas will no longer pay N750 fixed charges.

    They will be getting N10/kwh and N8kwh increase respectively in their energy charges.

    Similarly, the burden of N800 and N750 fixed charges would be lifted off the shoulders of Kaduna and Benin electricity consumers.

    These consumers will see an increase of N11.05/kwh and N9.26/kwh respectively 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 pays fixed charges of N17, 010. and N22, 141.

    Their energy charge will increase by N12.08kwh and N13.35kwh respectively.

  • Eight firms get NERC’s licences for 1,648.25Mw

    Eight firms get NERC’s licences for 1,648.25Mw

    The Nigerian Electricity Regulatory Commission (NERC) yesterday licenced eight firms with a combined capacity to generate 1,648.25 megawatts (Mw) of electricity and a distribution company (DisCo).

    Head, Public Affairs Department, Dr. Usman Arabi in a statement, said the licensing took place at NERC’s headquarters in Abuja.

    The licences were a mixture of on-grid, off-grid, embedded generation and distribution of electricity. One of the licensees, Ossiomo Offistes and Utilities/ Ossiomo Power &Infrastructure, based in Edo State will engage in electricity distribution and in embedded generation of 55Mw gas power electricity.

    Another is the Anambra State Independent Power Generation Company Limited, an on-grid gas-fired plant has the capacity for  528Mw capacity. There is also  Cummins Power Generation, Nigeria Limited (NBC) Ikeja with a capacity for 3.5Mw off- grid. It also has licence for a 1.7Mw to serve A&P Foods, in Agege, Lagos.

    The licence to Sinosun Investment Limited, based in Jibiya, Kastina State is for an on-grid, solar power generation of 100Mw capacity. In the same vein, LR-Aaron Power Limited, located in Gwagalada has licence for 100Mw solar powered electricity generation.

    While Lafarge Africa Plc for an on-grid, gas-fired 260Mw in Ewekoro, Ogun State. For Azikel Power Limited, the on–grid licence is for 500Mw power plant, in Bayelsa State, Middle Band Solar One Limited from Kogi State, was granted an on-grid licence for 100Mw.

    Only one firm got distribution licence while there are six gas-fired generation licence with a combined electricity capacity of 1, 348Mw, as well as three solar generations for a combined capacity of 300 Mw.

    The licence falls into three categories of embedded generation (55Mw),  two off –grid generation(525Mw) and six on-grid generation (1,588 Mw).

     

  • NERC’s planned electricity tariff hike aborted

    NERC’s planned electricity tariff hike aborted

    The House of Representatives has halted the planned increase in electricity tariff by the Nigeria Electricity Regulatory Commission, (NERC) pending the completion of its committee’s investigation of some stakeholders in the sector.

    In a December 15 letter addressed to NERC, the Hon. Babajimi Benson headed House Ad-hoc Committee investigating the activities of Electricity Distribution Companies (DisCos) told NERC to abide by the directives in a previous letter it wrote urging it to suspend the review of electricity tariffs in the country.

    The letter, signed by Benson, reads:  “In paragraph 3  of our letter dated 29th October, 2015 under the same subject heading, we requested you to suspend the implementation of any increase in electricity tariff until the committee concludes its investigations.

    “Further recall that at the joint investigative hearing with the Committee on Power, it was agreed that any tariff increase should be suspended until all stakeholders are carried along.

    “Our attention has been drawn to various news items published in many newspapers of yesterday December  13,  2015 to the effect that your commission has concluded plans to announce  new electricity tariff to Nigerians this week.

    “It is our opinion that any plan by your commission to announce new electricity tariff will run contrary to the spirit of the letter under reference and undermine the outcome of the investigative hearing by this Committee as it relates to infrastructure and billing by Electricity Distribution Companies.

    “We hereby once again, demand that you suspend the announcement and/or implementation of any increase in electricity tariff until (the) above stated issues are concluded.”

    The Committee through the letter, reminded NERC of its request for the list of Ministries, Department and Agencies (MDAs) indebted to the DisCos, adding that the Commission should forwards the list of DisCos to it to enable it conclude its investigation.

    The Reps Committee’s position on the planned tariff hike stemmed from the revelation by the NERC chairman, Sam Amadi during a recent hearing that DisCos over-bill customers and charge flat rates for consumers without meters.

  • 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.