FG Kicks Against Electricity Tariff Hike, Seeks Improved Service

Minister of Power, Sale Mamman, has stated that electricity tariffs will not be increased unless distribution companies, DisCos, improve the quality of supply, meter consumers and agree with consumers on rates.

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.

Saying that it would mean paying more for darkness as the electricity situation has not improved, Nigerians have condemned the tariff increase, even though the Discos argued that the current tariff plan is not viable to sustain their operations.

In a statement, Tuesday evening, the minister said President Muhammadu Buhari approved that the postponement of the increase should be for three months, but the tariff increase will, however, not commence unless the DisCos improve their operations, he said.

Read full statement below:

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.

Recall that the NERC had planned to increase the tariff on April 1 before it shifted the date to July following the ongoing lockdown in various parts of the country.