25 January 2013

Nigeria: Reprieve for SMEs As NERC Plans Downward Tariff Review

The Nigerian Electricity Regulatory Commission (NERC) has disclosed plans to review downward the fixed charges paid by the Small and Medium Enterprises (SMEs).

The Commission's Chairman, Dr. Sam Amadi disclosed at a press briefing in Abuja that a public hearing would be conducted for SMEs and other stakeholders to make contributions into the issue with a view to arriving at a more affordable fixed charge in order to ensure the sustenance and growth of the sector.

The Multi-Year Tariff Order (MYTO) 2 which came into effect in June 2012, led to the increase of fixed charges for some customers, but Amadi explained that "after monitoring the economic impact of the tariff regime on different customer classes, the Commission has decided to reduce the impact of the tariff on the SMEs."

This he noted was in line with standards of international best practice on economic regulation of the electricity sector.

The NERC Chairman also informed that the Commission's Board has reviewed request made to it by some electricity Distribution Companies (Discos) to unbundle customer classes R2 and R3 which have been merged under same tariff category.

The aim he said was to allow customers in the R2 category, who are mostly low income customers to pay less for electricity without undermining the capacity of the operators to recover their cost.

Amadi said the Commission has resolved to hold a public hearing on whether or not to separate the classes stressing that NERC would not want the R2 customers who use one phase meters to incur much tariff.

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