Nigeria: Govt, NERC Approved Hike in Electricity Tariffs, DISCOs Insist

29 June 2020

Electricity distribution companies (Discos) yesterday tackled the Nigerian Electricity Regulatory Commission (NERC), over an alleged attempt by the regulatory body, to dissociate itself and the federal government from the July 1 commencement of new electricity-tariff regime.

The Discos insisted that the new tariffs were approved by the federal government and NERC, adding that they were shocked to receive a letter from NERC directing them not to mention the federal government and the regulator in their notifications to customers on the take-off of the new tariffs.

The power distributors under the aegis of the Association of Nigerian Electricity Distributors (ANED), stated that the demand that neither the NERC nor the federal government should be mentioned in statements notifying customers of the hike was unacceptable.

A statement yesterday by the ANED' Executive Director in charge of Research and Advocacy, Mr. Sunday Oduntan, noted that in a regulated sector, the Discos cannot take a decision about a critical aspect of the sector like tariff without a nod from NERC.

"What has happened in recent days is that our regulator is warning us not to mention their name or the federal government in any of our communication about the tariff increase with our customers. This is certainly very unfair.

"Many stakeholders have expressed their concern at the unusual silence of our regulator, NERC, on the upcoming increase and it looks like a unilateral decision by the Discos.

"We'll like to inform Nigerians that tariff review (upward or downwards) is the primary responsibility of NERC as our regulator. We are required to submit our proposals and they have the final say," the Discos said.

ANED stated that its members were surprised to receive a letter from NERC warning them not to mention their name or that of the federal government in any public communications on the hike in tariffs.

The power distribution firms added that "while it is our obligation to communicate the increase, it is also important for customers to know that it is following standard processes of tariff adjustments in the sector with approvals from NERC and the federal government.

"As Discos, we believe in the rule of law. We will only carry out lawful approval and instructions by our regulator. The proposed increase and the timing of the increase in tariffs were done by NERC.

"It is their statutory responsibility. Discos alone cannot fix and approve electricity tariffs. We are very sensitive to the feelings and yearnings of our customers during this period of COVID-19."

The Discos said it was to cushion the effects of the pandemic on Nigerians that informed their proposal, in conjunction with the National Assembly, to suggest a two-month free electricity supply for residential customers, adding that it was unfortunate that the proposal was not approved by the federal government due to paucity of funds.

"The fact that the action is deliberately made to look unilateral is capable of creating public resistance, effectively setting Discos up to fail," the Discos stated.

All Discos had started communicating the new tariff regime, set to take effect from Wednesday since last week.

The communication, the Discos said, was geared at enlightening customers about the details of the 'service-based' tariff increase to ensure customers were fully aware about how it pertained to them and the supply band they fall under.

"The truth is that we are the public-facing arm of the sector, but what we collect is shared by everybody, including NERC.

"Our interest is in the nurturing of a commercially viable power sector. Political considerations and bickering will certainly not take us there," the Discos said.

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