27 March 2014

Nigeria: Govt Reacts to UN Query On Electricity Charges

Chairman of the Nigerian Electricity Regulatory Commis-sion (NERC) Dr. Sam Amadi has said the fixed charge in the Multi Year Tariff Order (MYTO) II is meant to sustain the network and electricity distribution infrastructure.

The commission regulates and set elect-ricity prices for operators in the electricity market in Nigeria.

Amadi said this while addres-sing newsmen in Abuja on Tues-day.

He noted that fixed charge was a constant component of the tariffs for the continuous sustenance of power infrastructure. The fee which is payable on monthly basis ranges from N500 to N750 depending on the location of the distribution company, Daily Trust report.

The NERC boss said without this, there may not be much investment in the distribution network as the cost of maintenance will be higher for power investors.

Amadi said with the frequent complaints by electricity consu-mers on the fixed charge, govern-ment had mulled its removal.

He however said removing the fixed charge would make consumers pay higher tariffs per kilowatt hour of N200.

That will be more expensive than the status quo he argued.

"The fixed charge is a buffer that enables the Distribution Companies (Discos) to guarantee their investment in power asset and their maintenance," Amadi said.

The Minister of Power Prof. Chinedu Nebo also in his reaction to the complaints raised on the current electricity tariffs said the fixed charge is a sustenance cost for fixing power infrastructure.

Nebo noted that the major constraint hindering adequate power supply was vandalism of gas pipelines which cuts off gas supply to the thermal generation plants. That has resulted to the reduction of the actual generation capacity to 3, 068 megawatts.

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