The Nation Newspaper

Tag: New electricity tariff:

  • ‘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.

  • 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.

  • ‘New electricity tariff killing businesses’

    The new electricity tariff, known as Multi-Year-Tariff Order (MYTO) II is killing Small and Medium Enterprises (SMEs) in the manufacturing sector, the National Association  of Small and Medium Enterprises (NASME’s) has said.

    This was one of the findings of a survey initiated by the association to assess the impact of the new electricity tariff on MSMEs in the country.  According to them, SMEs in the manufacturing sector have been the hardest hit by the MYTO II tariff.

    The findings of the survey were presented by Executive Secretary, NASME Mr Eke Ubiji during a one-day Policy Dialogue with the Nigerian Electricity Regulatory Commission (NERC) on the effect of the MYTO II policy on MSMEs in Nigeria.

    He said the SME operators have experienced increases ranging from 70 per cent to 440 per cent in their monthly electricity tariff. On the average, manufacturing SMEs across the country have experienced an increase of 188.6 per cent in electricity tariff since the introduction of MYTO II.

    He said the survey was initiated by NAMSE following several complaints received from members about the high cost implication of the new tariff.

    The survey, according to Ubiji,  which was conducted by NASME, took place from November 6 to 12 in the six geo-political zones in the country with field work conducted in Cross-River, Bauchi, Imo, Kaduna, Lagos states and Abuja.

    A total of 138 businesses were interviewed and 127 interviews were completed, 45 per cent of the completed interviews were NASME members, while 55 per cent were non- NASME members but SMEs as well as being members of other business membership organisations (BMOs), such as Nigerian Association of Small Scale Industrialists (NASSI), Manufacturers Association of Nigeria (MAN) and State Chambers of Commerce and Industries.

    Ubiji noted that the importance of MSMEs cannot be over emphasised, saying that findings from the survey shows that BMO members have a very negative perception about the MYTO II tariff and its introduction.

    “Also, more businesses have increased their average spend on electricity from between 10 per cent to 20 per cent of total operating costs before June 2012 and from 20 per cent to 30 per cent of total operating costs after June 2012. There has also been an increase from 11 per cent to 18 per cent on the average spend on electricity as a percentage of their operating cost since June 2012.

    NASME called for the elimination of all fixed charges.

    “In the medium to long term future, NASME recommends that the fixed charge is completely eliminated and all charges become variable based on consumption,” it stated.

     The organisation explained that this would ensure that its members only pay for what they consume and ultimately encourage energy conservation in the nation.

    It made a case for the introduction of a unified standard for information shown on payment receipts, explaining that the minimum information requirements for each Distribution Company to be the same, in order to improve transparency.

    Ubiji  said NASME wants the restructuring to include creation of complaint channels in Distribution firms to enable service providers to respond to complaints.

    He said: “Distribution Companies should be mandated to set up structured and effective complaint and resolution channels with stipulated resolution timelines. Appropriate penalties should be established with supervision by NERC.

    “ There should be awareness campaigns and sensitisation on MYTO 11 to MSMEs using grassroots/practical methods. NASME can provide input about appropriate consultation mechanism for SMEs”.

  • New electricity tariff: NASME, NERC parley holds Monday

    The National Association of Small and Medium Enterprises in Nigeria, NASME, is set to hold an interface and discussion session with the National Electricity Regulatory Commission in Lagos on Monday.

    The parley, it was learnt, is aimed at addressing the issues bordering on the pricing of electricity.

    In the recently released multi-year tariff order (MYTO), it was discovered to be having adverse effect on the operations of small businesses in the country.

    In the proposed dialogue with NERC, NASME is seeking a reclassification of MSMEs in the tariff regime and a reduced fixed charge based on a new classification.

    NASME has, therefore, prepared a detailed proposal on a more desirable tariff structure to be discussed at the event.

    The proposed meeting with NERC, it is believed, will further strengthen relationship between the private sector and government as well as grow the nation’s economy in the creation of more employment and the provision of goods and services very essential to the lives and livelihood of Nigerians in general.

    Following a preliminary survey conducted by NASME after four months of running business under the new tariff, it has been discovered that an average small or medium scale business owner has been forced to deploy scarce business investment revenues to pay huge electricity bills to ensure continuity of businesses.

    Major reasons that make the dialogue between NASME and NERC imperative include the facts revealed by the survey that an average SMEs has been classified in the same rate category as the large corporations, which is compounded by the discovery that the increase in monthly fixed tariff has not translated to an improvement in electricity services in the first four months of the tariff regime.

    According to the president of NASME, Alhaji Garba Ibrahim Gusau, “The implication of the findings of our survey is enormous and it is critical to the economy of the country. It signifies the weakening of the MSME sector, which is already resulting in reduced productivity and growing unemployment. We believe that at a time when the government is seeking to grow the private sector, stimulate investment and increase employment, particularly of the burgeoning youth sector, further burden of huge operational cost is not in the interest of anybody. This is critical because there are well-documented evidences that shows the MSMEs generate the most employment in the country rather than the large corporations. The proposed dialogue is, therefore, designed to create a platform for exchange of information on the new order as well as help NERC to get feedback from the MSME sector on the implementation of the new electricity order so far.”