Tag: tariff

  • ‘Why it will be contemptuous to increase electricity tariff’

    ‘Why it will be contemptuous to increase electricity tariff’

    Mr Toluwani Adebiyi is a Lagos-based activist-lawyer. He tells JOSEPH JIBUEZE why he is leading a campaign against increment in electricity tariff. 

     

    why did you warn the Nigerian Electricity Regulatory Commission (NERC) and distribution companies (DISCOs) against increasing electricity tariff?

    Going by the new threat as reported on page 11 of The Nation of September 29  that electricity tariff will be increased in October, Dr. Sam Amadi, the NERC chairman, and Chief Executive Officers of the 11 distribution companies may be on their way to jail. There is a subsisting court order not to increase tariff until the case is decided. The suit is to come up on November 24, 2015. It has become self-evident that these set of Nigerians have no respect for the rule of law and constituted authorities.

    Why are you disappointed with NERC?

    NERC’s disrespectful attitude to the court and the Senate is nothing but executive recklessness and an inordinate evil ambition. The Senate had accused the power sector players of engaging in unfair trading practices and warned them against such. If Amadi thinks by making this threat, he can retain his position as NERC Chairman in this present dispensation, it is a complete illusion that can never be attained. Consumers are tired of him and they will continue to agitate for his removal.

    Why did you file contempt charge against Amadi?

    On August 7, 2015, the NERC Chairman petitioned the Chief Judge of the Federal High Court, accusing judges of frustrating reforms in the power sector, casting aspersions and accusing judges of lack of knowledge and abuse of their judicial power. He accused judges of granting inconsiderate and reckless injunctions, directing courts to always exercise restraint and defer to his commission in the exercise of their judicial power ( an attempt to subjugate, undermine and intervene with the Court’s lawful responsibility). He contemptuously sought through the letter, to bring the court under control or subjection through his request for the establishment of a possible ‘Judicial Policy of Restraint’ during the pendency of, and in connection with, or on a matter before the Court. The letter was capable of obstructing or tending to obstruct or interfere with the administration of justice in a matter pending before the court, an act that was not only insulting and derogatory to the court, but was an obstruction of justice. It was contemptuous to the integrity of the court and punishable by committal to prison.

    What do you make of complaints against DISCOs?

    The Distribution Companies on the other hand have been devising dubious means to exploit the already exploited Nigerians, like refusing to read their meters and bringing outrageous estimated bill for consumers with functioning meters. For instance, a shoe maker in Iyana Ipaja, when his meter is read gets about N2,000 bill, but when they ignore the meter and come with estimated bill, he gets around N20,000.

    Do you think the power sector is improving?

    The evident failure of the power sector, particularly in May/June this year when the order, was made was described by President Muhammadu Buhari during his inauguration as a national shame. It affects everyone and it readily speak for itself.

    However, in all fairness to the sector, there have been some fractional improvement, which the president described in his Independence Day speech as encouraging, but it still falls short of the 18 hours daily supply demanded for. Besides, most communities are still in total darkness.

    Can you name some these communities?

    On September 30, residents in Edo State were seen protesting poor electricity supply. Onike in Yaba area of Lagos has since September 8 been in total darkness. Magboro area on the Lagos/Ibadan Expressway has been in darkness for the past three years. Isale-Ijebu in Ajah community has its transformer abandoned for the past three years without being connected.

    We learnt they bought the transformer with their contributions, yet was not connected due to their inability or reluctance to make another contribution for the connection. This is in spite of the monthly N750 fixed charge which is supposed to be meant for such purposes and for the servicing and maintenance of poles and cables. The DISCOs collect this fix charge but fail to use it for what it is meant for. Still, they keep on collecting the charge. This is nothing but fraud and for that reason, this crude and fraudulent fixed charge must be abolished.

    Why are you against increasing tariff?

    Eko and Ikeja DISCOs had attempted to co-opt Nigerians through the Manufacturing Association of Nigeria (MAN) and other groups into accepting tariff increment, which has failed. On one of such occasions, Mr. Ambrose Uche, Chairman Ikeja branch of MAN adequately warned Ikeja Disco, reminding them of the subsisting order of court. Co-opting people to accept increase when there is a subsisting order not to increase is disrespectful and dishonouris the court in its entirety.

    When do you think the increment should be made?

    Increment cannot come now. The little improvement is only encouraging but not yet sufficient. Adequate electricity supply must be balanced with new tariff. Both must be commensurate with each other. Power supply must be sufficiently convincing. There is no justification for an increment now. Increasing tariff now will be morally inequitable and statutorily unjustifiable.

    It is something that affects everyone including even my learned colleagues and the counsel representing the power sector in court. They are merely working for their fees and not mindful of the interest of the already exploited poor consumers and public interest at large. Left to me, I will never accept such a brief that is against the poor masses or public interest. It is glaring that the sector has cheated so many Nigerians through very excessively estimated bills even for those who have meters. So much has been invested in the power sector since 1999 with little to show for it.

    What became of the contempt charge you filed?

    At a stage, Form 48 for court’s Contempt was filed, but was later reluctantly withdrawn after a reasonable appeal by the court in the interest of the nation, as the polity had been heated up lately about orders of arrest. Despite that unusual mercy and pardon, these people can still not learn their lessons and respect an existing order of the court. It is quite unfortunate. But the law will always have its way. Enough is enough! Our system must be sanitised; the honour of the court must be sustained. Our court must be treated with honour; its integrity must not be trampled upon.

    What will happen if tariff is increased now?

    Nigerians are not stupid. We have been exploited for long despite government’s huge investment in power sector with no improvement. We cannot be further exploited by those feeding fat on consumers’ money. If NERC chairman and the DISCOs’ CEOs will not purge themselves of attitude detrimental to the honour of the court, then they shall not escape the consequences of dishonouring the court; they are on their way to prison.

    If they still insist on increasing tariff this month as threatened, in spite of the subsisting court’s order, and want to be treated and seen as scapegoats, they are free to make their choice and end up in jail. It is a free world.

     

     

     

  • Steel firm asks govt to impose protection tariff

    Africa’s biggest steel maker ArcelorMittal South Africa said unless the government imposes tariff duties to counter cheap Chinese steel imports, it may be forced to downscale or close one of its operations.

    Shares in the world’s largest producers of steel are trading at around their lowest levels in more than a decade and the company has said South Africa’s high labour costs, poor rail infrastructure and slowing economy have forced it to consider cutting back operations and jobs.

    “This company has made losses for five or six years, I don’t have an open cheque book,” Paul O’Flaherty, ArcelorMittal South Africa chief executive said.

    O’Flaherty confirmed that steel baron Lakshmi Mittal was in South Africa in June, where he briefed President Jacob Zuma’s government on the challenges facing the industry and asked for intervention to counter cheap Chinese imports.

    He said ArcelorMittal had applied for tariff protection of between 10 and 15 percent and that the government appeared “sympathetic” to the request.

    “By making the announcement of a potential closure of Vereeniging, is not putting a gun to anybody’s head, it is not a statement, it’s a reality of business,” O’Flaherty said.

    “When you have got bleeding, you must stop the bleed.”

  • NERC wants order on new electricity tariff vacated

    NERC wants order on new electricity tariff vacated

    The Nigerian Electricity Regulatory Commission (NERC) on Thursday filed an application to discharge the exparte order restraining it from implementing the new electricity tariff scheduled to take effect from June 1.

    Mr Tonbofa Ashimi, the counsel to the commission, informed the court that he had filed the application to discharge the exparte order, including a preliminary objection challenging the substantive suit.

    Justice Mohammed Idris of a Federal High Court, Lagos had given the order in a ruling on an ex-parte application filed by a Lagos lawyer, Mr Toluwani Adebiyi.

    Idris had restrained the NERC and the electricity distribution companies from effecting any increment in electricity tariff pending the hearing and determination of the suit.

    At the resumed hearing of the case on Thursday, Ashimi told the court:“My Lord, I am the counsel representing NERC and we have filed an application seeking to discharge the exparte order.

    “We also filed a preliminary objection challenging the suit in its entirety.”

    Responding, the plaintiff’s lawyer, Adebiyi told the court that he needed more time to reply to the application on points of law.

    Justice Mohammed Idris, however, adjourned sitting to July 21 for hearing of all pending applications.

    The News Agency of Nigeria (NAN) reports that at the last adjournment on June 11, NERC had yet to employ the services of a lawyer.

    Adebiyi had at the sitting urged the court to renew the order to preserve the subject matter of the suit.

    “My Lord, everybody is affected. Even this court is running on generator. There is a need to stop NERC from increasing the electricity tariff because Nigerians cannot afford such and there is no justification for such increment,” he said.

    Idris had in a short ruling held that “the ex-parte order remains valid and subsisting.”

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

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

    He wants the service charge on pre-paid meters not to be enforced until there was visible efficient and reliable power supply as being enjoyed in developed countries where the idea of service charge was borrowed from.

    Adebiyi is further asking for an order of court mandating the NERC to generate more power to meet the electricity demands of Nigerians.

    In addition, the lawyer is asking the court to mandate the NERC to make available to all Nigerians within a maximum of two years pre-paid meters to eliminate estimated billing system and arbitrary service charges.

     

  • Threat and tariff

    Threat and tariff

    • NERC and the power firms still have a lot to do to give Nigerians light at fair prices

    Last week, the National Electricity Regulatory Commission (NERC) spoke of its plan to revoke the licences of power generating companies that failed to meet up with their licensing obligations. At a licensing ceremony for four new entrants into power generation sub-sector, chairman of NERC, Sam Amadi, told his audience: “We have no choice but to revoke some licences. That is the only way that we can send the signal to people across the world to come and invest in Nigeria … For somebody with a piece of paper that is not performing, it remains a piece of paper. We have no choice but to make sure that potential investors deliver what they are supposed to deliver”.

    He would also inform: “Every licence has key performance indicators that are included in the terms of the licence. And it is also expected that within the first six months to three years, each licensee is expected to reach certain thresholds…”

    Ten years after the coming of the Power Sector Reform Act 2005 seems about time to separate the wheat from the chaff. Sanctions – or the threat of it – would seem the natural order of things if only to get things going in the beleaguered sector. The irony of course is that NERC that failed to sift the serious from the hordes of opportunistic players looking for fast and easy money has become the drum major for sanctions.

    Beyond that is the question of why only   a few out of the motley crowd of 124 licences awarded for power generation since 2006 have managed to plod on. Obviously, the sheer number of defaulters would tend to suggest a more serious problem than the simple invocation of legalism would indicate. In other words, much as we acknowledge the rules as carrying the obligations to meet up with key performance indices, the question is whether identifying the hordes of laggards for punishment is all there is to the problem. This point obviously bears stating given the frustrations daily voiced out by operators about the challenging regulatory environment, particularly the failure of the Federal Government to guarantee minimal conditions for their smooth and effective take-off.

    The challenge for NERC therefore becomes one of sifting of the black legs from investors with genuine operational issues, to ensure that players live up to their obligations and to adopt global best practices.

    That takes us to a related issue – the latest firestorm over tariff reviews being planned by the Distribution Companies (DISCOs). Yet again, we see the DISCOs and NERC as merely playing to type in willfully ignoring what is really at issue between the electricity consumer and the DISCOs. As far as we are concerned, what  the DISCOs should be after is fair and equitable returns on investment. As for the electricity consumer, he wants to see equity in pricing and value delivery which unfortunately he is not getting under the estimated bill regime defined more by the rule of the thumb. In short, the consumer wants to pay only for the units of electricity consumed which is only possible when he is availed of smart, pre-paid meters. It seems strange, utterly unimaginable that the DISCOs would seek to further extend the skewed and inequitable electricity market under which consumers are charged arbitrarily in spite of their failure to provide this basic item. For NERC, we say that this is hardly the time to play the ostrich; rather, it is time to assume the role of effective, even-handed regulator as contemplated by law. There is hardly a better place to start than getting the DISCOs to put timelines to the provision of pre-paid meters.

  • Eko DISCO, customers discuss planned tariff increase

    The management of Eko Electricity Distribution Plc (Eko DISCO) has held a consultative meeting with stakeholders within its network to discuss planned increase in tariff it wants to implement.

    Its Chief Executive Officer, Dr. Oladele Amoda, said the increase in tariff is to reflect realities in the industry, where the investors pay for gas, replacement, rehabilitation and upgrade of electricity equipment and facilities.

    He said: “All our activities in Eko DISCO are being guided by a regulatory framework and guidelines. The Nigerian Electricity Regulatory Commission (NERC), as the umpire, is committed to regulating quality services through effective monitoring.

    “One key mandate of the Commission as contained in the Electric Power Sector Reform (EPSR) Act 2005 is to put in place an efficient electricity market and structures that will sustain the market. This includes customer protection measures, and approval of cost-reflective tariff that will ensure sustainable business model for operators across the industry.

    “It is believed that ‘nothing good comes easy’ and Eko Electricity Distribution Plc has invested so much to sustain and enhance operations toward improving services to the customers. It is on the need to sustain continuous investment that we have called for this meeting, in order to consult with our esteemed customers on our proposed adjustment in tariff to partly meet the reality of the prevailing economic situation. “We shall continue to interact regularly on area by area basis to further strengthen the relationship and understanding between our company and our esteemed customers.”

    Amoda also said the company has invested substantially in upgrading the network as well as in human capacity development, adding that many staff have trained locally and abroad to update them with latest technology in power distribution, commercial and customers care activities.

    More training programmes and workshops have been proposed for further implementation, he added.

  • Order against new electricity tariff subsisting, says court

    Order against new electricity tariff subsisting, says court

    Justice Mohammed Idris of the Federal High Court in Lagos yesterday renewed the order restraining the Nigerian Electricity Regulatory Commission (NERC) from implementing the new electricity tariff.

    The new billing for power consumption was to take effect from June 1.

    Justice Idris, in a short ruling, held: “The ex-parte order remains valid and subsisting.”

    The judge had restrained NERC and the electricity distribution companies from effecting any increment in electricity tariff pending the hearing and determination of a suit by a Lagos lawyer, Toluwani Adebiyi.

    Yesterday, Adebiyi said NERC had been served but was yet to respond. He urged the court to renew the order so as to preserve the subject matter of the suit.

    He said: “My Lord, everybody is affected. Even this court is running on generator. There is a need to stop them from increasing the electricity tariff because Nigerians can’t afford such and there is no justification for such increment.”

    NERC’s legal officer Ifeanyi Umunna said the commission had complied with the interim orders, adding that the commission was in the process of appointing a lawyer to defend the suit. He pleaded for more time to do so.

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

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

    Adebiyi is asking for an order of court mandating the NERC to do the needful and generate more power to meet the electricity use 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 sectors of finance to power the sector.

    The lawyer is asking the court to mandate the NERC to make available to all Nigerians within a reasonable time of maximum of two years, prepaid meters as a way to stop the throat-cutting indiscriminate estimated bill and which must be devoid of the arbitrary service charge, but only chargeable on power consumed.

    In an affidavit in support of the suit personally deposed to by the applicant, the lawyer lamented that despite the motto and mission of NERC which were expressly stated as “keeping the light on and to meet the needs of Nigeria for safe, adequate, reliable and affordable electricity,” most communities in Nigeria do not get more than 30 minutes if electricity supply, while the remaining 23 hours and 30 minutes were always without light and in total darkness.

    “Nigeria poor masses are paying an estimated and indiscriminate residential bills ranging from N5,000 to N18,000, spending an average of N15, 000 to N20,000 for fuel to maintain generating set,” he said.

    Justice Idris adjourned till July 9 for hearing.

  • Poultry group canvasses electricity tariff relief

    Poultry group canvasses electricity tariff relief

    The Poultry Association of Nigeria (PAN)  is seeking  the government‘s support for  electricity tariff relief for producers.

    Its National President, Dr Ayoola Oduntan, said  electricity tariffs are too high for profitable business.

    Addressing its summit in Lagos, Oduntan said PAN has got the support of Nigerian Electricity Regulation Commission (NERC) for a reduction in electricity tariffs.

    To this end,he  said the association is working with NERC to ensure the directives to Electricity  Distribution Companies to implement the agriculture and agro based industries tariffs for the  sector, including poultry farming.

    According to him, the price  poultry  farmers are  offering  the market does not even recover cost of production, let alone a reasonable profit margin.

    He warned of  declining production while pleading for a rescue package, including some concessionary loans for farmers to bring them back into business and deferring loan payments for those who are surviving on the edge.

    According to him, if the poultry business is not rescued, the situation can worsen: production would decline further as more farmers leave, leading to squeezed supplies.

    He  urged  the  government to introduce policies and programmes for reducing their production cost, adding  that  though  poultry entrepreneurs  are trying  to achieve   self-sufficiency in poultry products,   they cannot compete with  smuggled  products from neighbouring markets .

    According to him, around 70 per cent of their investment goes to procure feed, adding that the producers have no option but to import feed as local production cannot meet the growing demand.

    He urged the government to encourage farmers to grow maize and soybean to bring down poultry production costs, adding that the industry will be competitive only if the government encouraged farmers to embrace new technologies.

  • ECOWAS common tariff won’t benefit Nigeria, agents claim

    ECOWAS common tariff won’t benefit Nigeria, agents claim

    Is the Economic Community of West African States (ECOWAS) Common External Tariff (CET) of benefit to Nigeria?

    No, says the Association of Nigerian Licensed Customs Agents (ANLCA), which is championing the review of CET by the incoming Muhammadu Buhari administration.

    CET, ANLCA claims, has made Nigeria’s ports the most expensive in West Africa because of the multiple charges collected from importers.

    “These charges are hindering the trade facilitation programme, while businesses in other sub-regional ports like Cotonou are thriving,” the agents said, adding that this is why CET cannot be implemented in Nigeria unless the government reviews it.

    ANLCA, it was learnt, has drawn the battle line with the Customs and the Council for Regulations of Freight Forwarding in Nigeria (CRFFN) over CET’s implementation and practitioners’fee collection.

    ANLCA asked its members not to pay the fee, which CRFFN would have started collecting since May 11.

    In a Public Notice, the CRFFN said: “In exercise of the powers conferred on it under Section 4 (d) and 6 (2) (C) of the CRFFN Act No 16 of 2007, notice is hereby brought to all registered freight forwarders; all seaport terminal operators; all airport cargo terminal handlers and the public that the collection of practitioners’ fee by the council commences on Monday, May 11, 2015.”

    Besides asking its members to shun the directive, ANLCA has suspended further discussions with CRFFN.

    ANLCA said the directive for the fee collection can only emanate from the National Assembly after the CRFFN board must have been constituted by the government.

    ANLCA President, Prince Olayiwola Shittu, is blaming the high cost of cargo processing on the introduction of what he calls “obnoxious levies”.

    Importers, he said, pay multiple charges before collecting their goods, urging the government to address the problem and reduce the cost of doing business.

    Shittu said: “Importers pay Customs duties and levies that are not uniform in most of the seaports. Other tariff that make the ports expensive are the seven per cent development levy; one per cent comprehensive import supervision scheme; 0.5 per cent  ECOWAS Trade Liberation Scheme (ETLS); NIMASA/NPA Sea Protection Levy (SPL); haulage cost – transportation per 20-foot equivalent unit (TEU) and terminal operator progressive stage charges.

    “Importers also pay terminal operator documentation; terminal operator examination; terminal operator scan fee; terminal operator scan loading fee; terminal operator delivery; terminal operator terminal handling and terminal operator labour fees.

    “They also pay shipping line demurrage, shipping line agency, shipping line documentation, shipping line telex release, shipping line container deposit fees, terminal operators two weeks additional advance rating period, shipping line two weeks additional advance rating period, shipping line minimum of one month grace for container deposit refund, freight forwarders professional fee – unstreamlined, and several inconsiderate charges at the bonded terminals”.

    An ANCLA member, Mr Segun Ogusanu, derided the five per cent Value Added Tax (VAT) and one per cent Pre-Arrival Assessment Report (PAAR) charge as some of the multiple charges.

    Ogunsanu said for CRFFN to be effective, it must comprise elected practitioners.

    “CRFFN is headed by a Registrar, who is the Chief Executive. He is a permanent staff member unlike others who are elected into office or appointed by the Minister of Transport. The Board of the CRFFN cannot remove him without the approval of the Minister, a position that makes the chief executive officer very powerful and issue any notice he likes without consulting the people on whose behalf the council was established.

    “Since a new board has not been constituted and election held, the council is a one-man show,” he said.

    ANLCA’s  National Publicity Secretary Kayode Farinto told The Nation that the National Executive Council (NEC) has suspended further discussions with CRFFN.

    He said: “NEC has constituted a committee to interface with the management of CRFFN to come up with recommendation towards further engagement.

    “The committee is empowered by NEC to discuss, negotiate and take all appropriate steps towards ANLCA professional interest.

    “The committee members include the association’s former president, Chief Ernest Elechukwu; Chief Peter Obi; Prince Taiye Oyeniyi; Mayor Ekweche; David Kanikwu; Bayo Oyekanju; Alhaji Umar Ibrahim and Kayode Farinto.”

    Nigerian Shippers Council (NSC), it was learnt, may intervene in the face-off between the CRFFN and ANLCA to ensure peace at the ports.

    Its Executive Secretary, Mr Hassan Bello, sources said, may summon ANCLA and CRFFN officials to a meeting before the week runs out.

    CRFFN Registrar, Sir Mike Jukwe, said the collection of practitioner’ operating fees was a directive given to his agency by the Federal Government.

    “As an employee, I will convey the position of ANLCA to the government and will be directed further,” he said.

     

  • ‘Tariff drop not for homes’

    ‘Tariff drop not for homes’

    THE management of Abuja Electricity Distribution Company (AEDC) has said the 50 per cent reduction in electricity tariff by the Nigerian Electricity Regulatory Commission (NERC) will not affect residential consumers, most of who fall under the R1 and R2 tariff categories.

    In a statement yesterday in Abuja, the company said the clarification was necessary following misconceptions by some of its customers that the reduction by NERC was for all categories of consumers and, therefore, resisting payment of their electricity bills.

    According to AEDC, the tariff for customers in the R1 & R2 tariff class was not adjusted in the last tariff adjustment by the NERC, and hence these classes of customers were not affected in the new tariff reduction, which it said was meant for commercial and industrial customers alone.

    Quoting the Chairman of the Nigerian Electricity Regulatory Commission, Dr. Sam Amadi, in confirmation of its position, AEDC said “majority of the residential customers in the 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 and high-end residential consumers, whose tariffs were increased”.

  • 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.”