Vanguard (Lagos)

Nigeria: NERC to Address Fixed 'Crazy Bills' for SMEs

Small and Medium Enterprises (SMEs) may soon heave a sigh of relief as Nigerian Electricity Regulatory Commission, NERC , has taken a resolution to conduct a public hearing to arrive at a more affordable fixed charge for them and other stakeholders. The new affordable fixed charged will ensure the sustenance and growth of the sector.

It would be recalled that, the Multi-Year Tariff Order [MYTO], released in June 2012, saw to the increase of fixed charges for some customers.

However, this revision was done to ensure the viability of the electricity sector, but, after monitoring the economic impact of the tariff regime on different customer classes, the Commission decided to reduce the impact of the tariff on the SMEs.

Chairman of NERC, Dr. Sam Amadi said "This is in line with standards of international best practice on economic regulation of the electricity sector."

According to a statement obtained by SWEETCRUDE from NERC, the commission also reviewed the requests made by some electricity distribution companies (DISCOs) to unbundle customer classes (R2 and R3), a development that will see to customers in the R2 category, who are mostly low-income/working class customers paying less for electricity without undermining the capacity of the operators to recover their costs.

The DISCOs have also requested for an imposition of Kilo Volt Amp (KVA) charges to users of heavy industrial machinery that are known to cause stress to the system.

This charge will serve as a deterrent to such customers and compel them to install capacitor banks that will be used to reduce this impact. The charge, if implemented will affect the MYTO2 and as a consequence, the Commission is to soon issue a public notice to consider the views of relevant stakeholders.

NERC has also received a request from Nigerian Bulk Electricity Trading Plc (Bulk Trader), to grant a special permit to the 450 megawatt Azura -Edo power plant located in Ihovbor, Benin, Edo State. The permit is in respect of a site specific wholesale gas price that is higher than the official price to enable it complete its financial transactions and commence construction of the power plant.

Though NERC agrees that it is important to allow Azura - Edo power plant a special wholesale price to cover its costs of gas, the Commission has resolved that a decision will be made only after a public notice has been issued and comments received from the Nigerian National Petroleum Corporation -NNPC, DISCOs, electricity customers and other stakeholders have been entertained. A public hearing will be scheduled for this purpose.

NERC boss said "NERC insists on making decisions through proper consultation and transparent processes."

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