Nigeria: Electricity Tariffs Won't Be Increased Unless Discos Improve Operations - Minister

(file photo).

Electricity tariffs will not be increased unless distribution companies (DisCos) "improve quality of supply, meter consumers and agree with consumers on rates," the power minister, Sale Mamman, has said.

Mr Mamman was reacting to an announcement by the Nigerian Electricity Regulatory Commission (NERC) that tariff increase that was to commence on April 1 had been postponed.

PREMIUM TIMES reported how NERC announced the postponement on its Twitter handle on Tuesday. The regulator had announced the tariff increase last December.

Many Nigerians have condemned the tariff increase, saying it would mean paying more for darkness as the electricity situation has not improved. The DisCos have, however, argued that the current tariff plan is not viable to sustain their operations.

In his statement Tuesday evening, Mr Mamman said President Muhammadu Buhari approved that the postponement of the increase should be for three months. Even then, the tariff increase will not commence unless the DisCos improve their operations, he said.

Read Mr Mamman's full statement below.

The federal ministry of power has delayed the implementation of tariff measures for the next three months as palliative measures as against the ravaging COVID - 19 pandemic in the country.

The Nigerian Electricity Regulatory Commission had said Nigerians were to pay more for electricity Wednesday, April 1, 2020.

The agency disclosed this in its December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020.

According to the Commission, the order determined the minimum remittances payable by the distribution companies in meeting their market obligations based on the allowed tariffs.

But in a statement signed by the Power minister, Sale Mamman, on Tuesday, said the postponement followed president Muhammadu Buhari order to grant a moratorium loan for certain Federal Government funded facilities to the Nigerian Public.

President Buhari on Sunday had ordered a three-month moratorium on loans all government funded loans from institutions such as the Bank Of Industry and Nigerian Export-Import Bank and TraderMoni, MarketMoni and FarmerMoni beneficiaries as relief efforts to tackle the Covid-19 impact on the Nigerian economy.

He said, "Tariffs will only be raised as the Distribution Companies (DISCOs) improve quality of supply, meter consumers and agree with consumers on rates. DISCOs that fail to improve will be sanctioned.

READ FULL STATEMENT

FEDERAL MINISTRY OF POWER OFFICE OF THE HONOURABLE MINISTER PRESS RELEASE

COVID-19; Minister's Statement on Tariffs and Palliative measures for the Power Sector.

As part of the Federal Government efforts to ameliorate the current challenges occasioned by the ravaging COVID - 19 pandemic, The Nigerian Electricity Regulatory Commission today issued an Order that included a 3-month delay in the implementation of tariff measures.

The 3-month delay in the implementation of tariff measures is consistent with His Excellency the President's announcement on March 29th granting a moratorium for certain Federal Government funded facilities to the Nigerian Public.

There will be no tariff action in APRIL. Thereafter, tariffs will only be raised as the Distribution Companies (DISCOs) improve quality of supply, meter consumers and agree with consumers on rates. DISCOs that fail to improve will be sanctioned. This is based on the outcome of the public hearings on tariffs. The Ministry is supportive of a "service reflective" tariff system which is more equitable and will encourage investment in the sector. The Ministry will work with NERC to ensure that improvements happen in the entire DISCO network and estimated billing is capped per NERC Order 197/2020. This will eliminate arbitrary billing that Nigerians have raised issues with.

We are also implementing other key emergency measures to support the NESI (Nigerian Electricity Supply Industry). We are working with the CBN to ensure payments to the generators and gas suppliers through the Payment Assurance Facility (PAF) are expedited to support power supply. TCN is also creating emergency measures to ensure staff will be available to monitor the grid and perform technical interventions.

These changes and emergency measures will have an impact on Government finances. The Power Sector Recovery (PSRP) Financing Plan is being updated to reflect the changes. The Financing Plan will help support ongoing discussions with the World Bank on financial support for the sector and the transition away from tariff support as Government optimises its resources.

During this difficult time the President has instructed that critical infrastructure projects and programs for the poor and underserved be continued. The Ministry will continue to implement key infrastructure programs such as the Siemens/Presidential Power Initiative (PPI). The Ministry through TCN will also continue the Transmission Rehabilitation and Expansion Program in partnership with the World Bank, African Development Bank, AfD, JICA and other key development partners. To support the underserved and citizens without access in this difficult time, the Ministry will accelerate programs with the Rural Electrification Agency (REA) focusing on Solar Home Systems and Solar Mini-Grids that impact the poor. These programs continue to be supported by the World Bank, African Development Bank, USAID, DFID and other key development partners. The Ministry is also in discussions with the Central Bank to provide financing to accelerate Solar Off-Grid programs with the REA. The Ministry will engage with key NESI players in this difficult time to ensure sustainability of supply.

I commend players in the NESI that have made commitments to ensuring stable power supply in this period. Thank you to all the industry players for this patriotic stand. Indeed, times like these demands nothing less.

I am assuring Nigerians that the priority of this government as directed by President Muhammadu Buhari is to provide support for all citizens as we battle the global pandemic.

Engr. Sale Mamman Honourable Minister of Power 31/03/2020

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