The Nation Newspaper

Tag: NERC

  • Court bars NERC from tariff increment

    Court bars NERC from tariff increment

    AFederal High Court in Lagos yesterday restrained the Nigerian Electricity Regulatory Commission (NERC) from implementing the new electricity tariff billed to be effective from Monday, June 1.

    Ruling on an ex-parte motion filed by a lawyer, Toluwani Adebiyi,  Justice Mohammed Idris restrained NERC and the electricity distribution companies (Discos) from effecting any increment in electricity tariff pending the determination of the suit.

    Following the commission’s announcement of proposed increment, Adebiyi had prayed the court to stop NERC and the Discos from foisting further hardship and unjustifiable increment of tariff on Nigerians.

    Adebiyi is seeking an order restraining the NERC from implementing any upward review of electricity tariff without a significant improvement in power supply at least for 18 hours in a day in most communities in Nigerian.

    He wants an order restraining the NERC from foisting compulsory service charge on pre-paid meters not until “the meters are designed to read charges per second of consumption and not a flat rate of service not rendered or power not used.”

    He also wants the service charge on pre-paid meters to not be enforced until there is visible efficient and reliable power supply like those of foreign countries where the idea of service charge was borrowed.

    The lawyer is praying the court to mandate the NERC to do the needful and generate more power to meet the electricity need of Nigerians, adding that the needful should include and not limited to a multiple long-term financing approach, sourced from the banks, capital market, insurance and other finance sectors.

    Granting the applicant to serve the respondents all the processes in its office in Abuja, the judge adjourned the case to June 11.

  • NERC may approve new tariff for TCN

    NERC may approve new tariff for TCN

    THE Nigerian Electricity Regulatory Commission (NERC)  may approve a cost-reflective tariff for the Transmission Company of Nigeria (TCN).

    Its Chairman, Dr. Sam Amadi, who broke the news said as soon as the government reforms the corporate governance of the TCN, it would have cured its lack of investaible fund and guaranteed sustainable expansion of transmission services in the country.

    Amadi said: “Once we reform the corporate governance of TCN and provide it with a cost-reflective wheeling charge, then we have cured its perennial lack of investible fund and guaranteed sustainable expansion of transmission services.”

    He said the commission is planning radical solutions to tackle the transmission challenges in the electricity market, adding that plans are underway for government to unbundle the TCN into two distinct firms: Transmission Service Provider (TSP) and Independent System Operator (ISO).

    “We have already secured a technical paper on this and the commission has the commission has asked its internal technical committee to undertake comparative jurisdictional research to compare models from similar and different electricity markets across the world.

    “After the report of the committee we will conduct public consultation to ascertain the views of other stakeholders. Our mind is drifting towards having a non-profit ISO to be jointly owned and funded by all generators and distributor in the market.

    “This saves government from using its public sector borrowing or budget to fund expansion in transmission services. Everything will be financed by the market and there will still be no service failure. That is one the benefits of some of NERC’s bold interventions. They are creating financial viability and service improvement with less and less of public sector financing. This is a huge relief in these days of lean revenue.”

    According to him, following the commercially attractive gas price and the flag-off of the Transition Electricity Market (TEM) that now makes all electricity market value chain bankable, the suppliers will now enter into gas supply agreements that make it mandatory for them to supply gas.

    With the contracts, said the chairman, the suppliers would become liable should they refuse to supply gas.

  • NERC queries AEDC for over-billing customers

    NERC queries AEDC for over-billing customers

    The Nigerian Electricity Regulatory Commission (NERC) yesterday  issued the Abuja Electricity Distribution Company (AEDC) notice of enforcement action over what it described as ‘manifest and flagrant breaches’ of approved methodology for estimated billing of electricity consumers.

    In the notice , it directed Abuja Electricity Distribution Company (AEDC) to explain within seven days why “enforcement action should not be taken against you and sanctions meted accordingly for non-compliance with the terms and conditions of the licence granted you, the Methodology for Estimated Billing 2012 and directives to submit a comprehensive data used for the billing of unmetered customers” for the period under review.

    Its Head, Public Affairs Department, Dr. Usman Abba Arabi in a statement yesterday, said the notice is a follow up to previous investigations and forensic observations of electricity distribution companies’ operations through which an unusual increases in estimated billings of electricity consumers were observed within the last quarter of last year by NERC.

    AEDC and some others were subsequently invited for explanation for the unusual increase in estimated billings.

  • NERC gives Disco free hand to propose tariff

    NERC gives Disco free hand to propose tariff

    Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi Wednesday said that the Electricity Distribution Companies (Discos) have got the permission to in consultation with the electricity consumers propose tariffs for customers.

    Whatever tariff the companies propose, he said, will still be subject to the approval of the commission.

    Amadi addressed journalists in Abuja after the commission’s monthly meeting with the Chief Executive Officers of the Shiroro Hydro Power and Ikeja Disco.

    His words: “Finally, I will like to say that ultimately, the new tariff regulation makes it mandatory that the distribution companies will consult the consumers to establish the tariff they are proposing.

    “It should be affordable and accessible. The idea now is that the regulator will a little bit take a more passive position and therefore the Discos will have to talk to the consumers and we will now review those proposals based on the outcome of the consultation.”

    The chairman said that next week NERC would commence a public hearing on supply conditions with the Abuja Disco to make the consumers understand why there has been excessive drop in power supply and other constraints.

    Amadi recognized that the electricity supply condition in the market has been poor “since the last four or five weeks due to shortfall in rainfalls for the hydros and of course shortfall of gas to power plants.”

    He insisted that all the conditions necessary for increase in capacity are available; stressing that the commission was hopeful that in the next couple of weeks the situation will increase.

    The chairman revealed that the meeting was centered on the issues of power supply following complaints about lesser hours of power supply arising from shortage of gas supply due vandalism and water shortage from the hydro part of the supply chain.

    He expressed satisfaction with the level of market compliance as most of the companies are posting their guarantees and the bulk traders had activated about seven contracts.

    Amadi said that there was also a review of the gas supply agreement which was being concluded, stressing that “we are satisfied with the level of compliance with the conditions of the Transition Electricity Market ( TEM) and we are also satisfied with how fast the TEM is moving.”

    The expectation of power supply in the market, he said, has not been met due to low power supply, which has now resulted in the recourse to the procurement of embedded generation by such firms as Ibadan and Eko in the short term.

    To remedy the dwindling power situation, the Managing Director, Ikeja Disco, Mr. Abiodun Ajipowobaje explained that the firms are working out modalities of providing power from other sources instead of solely relying on the national grid.

    On the recently review tariff, Amadi explained that the tariff for residential consumers was not increased in January because it was frozen.

    He noted that order that was issued on January 1st 2015 continued to be valid until April 1st when the new amendment would take place.

    Amadi posited that consumers must pay the bills of power consumption before the amendment.

    The amended order stipulates that the Disco should not transfer commercial losses to the consumers.

  • Electricity commission explains tariff cut

    Electricity commission explains tariff cut

    The Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr Sam Amadi, said on Thursday that the recent cut in electricity tariff affects only residential, industrial and commercial consumers.

    Amadi made the clarification when a delegation of the Electricity Consumers Association of Nigeria (ECAN), led by the President Mr  Chijioke James paid him a courtesy visit in Abuja on Thursday.

    He said NERC rule provided a 60-day window to verify claims on the reviewed tariff whose implementation started on Jan. 1.

    Amadi said it was within the period that Manufacturers Association of Nigeria (MAN) and other consumer groups made an appeal for the tariff review.

    He said the commission reduced the tariff when it saw merit in the argument put forward by MAN that the Jan. 1 increase in tariff would impact on their businesses.

    “We have always tried to listen to complaints from consumers and operators alike and we carry out tariff reviews when necessary. We are a responsive and accountable regulator,’’ Amadi said.

    He said the reduction in tariff was in line with the Commission’s Business Rules.

    “Majority of the residential customers- R2 and R1 categories did not experience the January 1, 2015 increase in tariff.

    “They will not also see any reversal or reduction in tariff as the industrial, commercial consumers would do”, he said.

    James had earlier said the group was at the commission to commend it for reduction in tariff for some classes of electricity consumers.

    “We have been very critical of NERC to see that consumers enjoy power supply, but it will be bad to see that a government agency has done something right and we fail to commend it openly,” James said.

    He said that ECAN needed the support of agencies like NERC and Consumer Protection Council amongst others to enlighten consumers on the dangers of patronising sellers of fake electrical equipment.

    “ECAN will use this opportunity to urge NERC to encourage electricity distribution companies to improve on their response rate in resolving complaints from consumers nationwide,” he said.

  • Details of 50% tariff reduction unclear to DISCOs

    Seven days after the Nigerian Electricity Regulatory Commission (NERC) issued an order that collection losses should not to be passed on to electricity consumers, the distribution companies (DISCOs are yet to know the details of the new tariff, it was learnt yesterday.

    It was also gathered that the commission was yet to publish the new tariff structure, which varies from DISCO to DISCO as at press time yesterday.

    The Managing Director, Abuja Distribution Company (AEDC), Mr. Neil F. Croucher who spoke to reporters in Abuja yesterday lamented: “Well, we are yet to see the detail. It has not been published by NERC. But I understand that that 50 per cent was just an average and it varies from distribution company to distribution company.”

    NERC Chairman, Dr. Sam Amadi had last week announced that collection of losses for all DISCOs has been set at zero level.

    Amadi said: “Therefore, on March 9, 2015, NERC issued a new order to the effect that henceforth collection loss, which is defined as the ‘amount billed but not collected’, will not be automatically passed on to consumers of electricity. Consequently, the collection loss for all DISCOs is set at zero. It is now the responsibility of DISCOs to convince the regulator of any exceptional circumstances for such loss to be passed to the consumers.”

    According to Croucher, the AEDC is characterised by high commercial losses, which is as high as 50 percent and could mostly be remedied when every customer pays for electricity.

    He explained that for the company to bring down the tariff, customers have to pay for electricity because  non-payment of bills hold down the transformation process.

    Crourcer said energy theft and commercial losses are the basic setbacks in the electricity market since a study has revealed that the technical losses which the firm incurs is only about 14 per cent. He said due to the installation of new transformers, the AEDC has reduced the losses.

    Croucher said: “In our case just about  50 per cent losses, we still have low level of generation. So, the distribution companies have the challenges of high losses in our business . But what we do to bring losses down , is to help bring the price down everyone needs to pay for  electricity .

  • MAN commends FG on electricity tariffs reduction

    The Manufacturers Association of Nigeria (MAN), Ogun State Chapter, on Thursday commended the Federal Government for reducing electricity tariff by 50 per cent.

    The President of the association, Mr. Wale Adegbite, told the News Agency of Nigeria (NAN) in Ota that the “step was a welcome development’’.

    Adegbite said that the Nigerian Electricity Regulatory Commission (NERC) had finally listened to the complaints of manufacturers.

    “But, what the NERC has done is to reverse the increase the commission did in January, so it is not really a reduction,’’ he said.

    Adegbite said that there was need for the Federal Government to create enabling environment like provision of stable electricity, good roads and adequate security.

    He said that manufacturers as the engine of economic growth of any nation would be able to thrive and generate employment where good infrastructure exist.

    NAN reports that the Federal Government on Tuesday announced a 50 per cent reduction in the nation’ electricity tariffs.

  • Electricity tariff slashed by 50%

    THE Nigerian Electricity Regulatory Commission (NERC) has reduced electricity tariff by as low as 50 per cent and as high as 103 per cent depending on the zone. This comes on the heels of complaints by electricity consumers over the estimated billings regime introduced by the electricity distribution companies (DISCOs)

    NERC in a statement on its website blamed the DISCOs for passing the bulk of lost energy on power consumers forcing them to pay for what they did not consume. The Commission determined as inappropriate to transfer to consumers, collection losses that are controllable by DISCOs. It stated that it is the responsibility of the DISCOs to collect their revenue from their customers.

    “Failure to do so should not be a penalty to customers who pay their bills. It is clear that removing the collection losses will lead to lower tariffs for consumers. The removal of collection losses from customer tariff has reduced tariff by more than 50 per cent in some places. Please note that the reduction does not affect the CBN facility and its repayment,” it stated.

    NERC Chairman Sam Amadi, said the Commission stated that on January 1, 2015 when it approved the take off of the Multi-Year Tariff Order (MYTO 2.1) that “we have received several complaints against the increase in tariff of different consumer classes. Industrial and commercial consumers under the auspices of the Manufacturers Association of Nigeria (MAN) petitioned the commission asking for a review of the MYTO 2.1 and requested drastic reduction of their tariff. They claimed that such astronomical increase in tariff would kill their business and lead to massive job losses.”

    Amadi argued that the Electric Power Sector Reform (EPSR) Act and the Business Rules of the Commission mandate the Commission to review its decision at the petition of an interested party who complains within 60 days of the decision.

    “Pursuant to these rules, we organised public hearing and received evidence from consumer classes on the affordability of the new tariff. The Commission also invited the Chief Executive Officers of the distribution companies to the hearing to respond to the case of the consumer groups.

     

  • NERC reduces tariff by 50 per cent

    NERC reduces tariff by 50 per cent

    The Nigerian Electricity Regulatory Commission (NERC) Tuesday announced a reduction of electricity tariff by over 50 per cent through the relief of customers from payment of collection loss, which was accountable for the high tariff hike on 1st January this year.

    Its chairman, Dr. Sam Amadi, who broke this news at Abuja Tuesday recalled that amount of bills not collected by the Electricity Distribution Companies ( Discos) were transferred to the consumers in form of tariff increase by the commission, which has now absorbed   the customers of such task , now insists that the Discos must  convince NERC why consumers have to bear the burden.

    Amadi said that the “removal of collection losses from customer tariff has reduced tariff by more than 50 percent in some places, noting that the reduction does not affect the Central Bank of Nigeria (CBN) facility and its repayment.”

    The commission, said Amadi, had received several complaints against the increase in tariff of different consumer classes.

    He added industrial and commercial consumers under the auspices of the Manufacturers Association of Nigeria (MAN) petitioned the commission, asking for a review of the MYTO 2.1 and requested drastic reduction of their tariff.

    According to the chairman, they claimed that such astronomical increase in tariff would kill their business and lead to massive job losses.

    He submitted that: “Therefore, On Monday, March 9, 2015 the Nigerian Electricity Regulatory Commission (NERC) issued a new order to the effect that henceforth collection loss, which is defined as the ‘amount billed but not collected’, will not be automatically passed on to consumers of electricity. Consequently, the collection loss for all DISCOs is set at zero.

    “It is now the responsibility of DISCOs to convince the regulator of any exceptional circumstances for such loss to be passed to the consumers.”

    He said that this new direction comes as part of the commencement of the Transitional Electricity Market (TEM).

    Amadi explained that the “TEM is built on bilateral trading between parties and is geared towards ensuring an efficient market where cost reflectivity will lead to more affordable electric services for consumers.

    “As part of preparing for TEM the Commission has issued a tariff review regulation that requires the utilities to consult with relevant consumer classes before presenting a tariff review application to the commission to approve.

    “It is now the responsibility of the DISCOs to prepare and present to the Commission a tariff that will ensure that they recover their costs and ensure efficient operations.”

    Amadi stressed that this new order now amends the MYTO 2.1 and has reduced the tariff to be paid by all class of consumers. In the review MYTO 2.1 the Commission followed due process and the regulatory principles.

    He said that the Electricity Power Sector Reform (EPSR) commits the Commission to ensuring full recovery of prudent costs for efficient operators. According to him, the Commission is obligated to make sure that only prudent and efficient costs are passed to consumers.

    He however maintained that the principle is to ensure that the distribution company operates efficiently and provide quality and affordable services to consumers.

    Amadi stressed that;”NERC remains committed to the principle of cost- reflective pricing and to the development of an efficient and financially viable electricity market.

    “These are important to support the investment that is needed to ensure the electricity supply industry meets the needs of the Nigerian economy.

    “The decision to review tariff is completely compatible with the terms of the privatization and has been reviewed with the Bureau for Public Enterprises (BPE). NERC and BPE are working together to advocate for series of fiscal policies that will foster easier access to investible capital to further increase capacity and enhance reliability in the sector.”

  • NASENI urges NERC’s local content law implementation

    NASENI urges NERC’s local content law implementation

    The Executive Vice Chairman/Chief Executive of the National Agency for Science and Engineering Infrastructure (NASENI), Dr  Mohammed Sani Haruna, has urged the full implementation of the Nigerian Electricity Regulatory Commission (NERC) local content regulation.

    He commended the commission for issuing new regulations on local content development for the power sector.

    In a statement in Abuja, Engr. Haruna said the local content law would encourage organisations such as NASENI to become major players in the power sector.

    NASENI, he said, had the technology and production capacities for solar energy in Nigeria, regretting, however, that low patronage by government ministries, departments, agencies (MDAs) and Nigerians in general had led to a glut.

    He said:  “Available data shows that 60 per cent of Nigerians living in rural communities do not have access to the National grid, but with full patronage of NASENI 7.5megawatt solar panel which has local content, epileptic power generation in the country will become a thing of the past.

    “NASENI Solar Energy Limited, Karshi, the only manufacturers of solar panels in West Africa, since 2011 has produced about 4000 pieces of solar panels. Nigerians can enjoy constant power generation since the country receives 5.535 Kwh per m2 per day of solar energy and an average of 6-9 hours sunshine per day.”

    In view of the abundance of sunshine all year round and the location of the country within the tropical region and the characteristic isolated pattern of human settlement, he noted that solar technology was particularly well suited for use in Nigeria and charged NERC to ensure full implementation of local contentm in the power sector.

    The NASENI Chief said the section of the new law on contracts/procurement gave a lot of hope to local producers.

    Making reference to the Regulation, he quoted:  “All licenses shall give first consideration for goods made in Nigeria and services provided by Nigerian firms in award of contracts. All operators and project promoters shall consider Nigerian content when evaluating any bid at commercial stage and the bid containing the highest level of Nigerian content shall be selected.