Electricity tariff to increase again as NERC seeks to conclude extraordinary review
NERC postpones increase of electricity tariffs
approves N215 billion “for Ikeja and Eko DisCo upgrade
The NERC said the approved upgrades would improve the distribution of power supply by the DisCos.
Published 7 hours agoon May 4, 2021By William Ukpe Discos, TCN suspends KEDCO, TCN suspend Kano Electricity Distribution Company, Kano Electricity Distribution Company, Transmission Company of Nigeria, Market Operator in Nigeria’s power sector
The Nigerian Electricity Regulatory Commission (NERC) announced it has approved the sum of N121.92 billion for Ikeja Electric Plc infrastructure upgrade for the next 5 years and also N93.76 billion for Eko Electricity Distribution Company (EKEDC) infrastructure upgrades within the same period.
The NERC disclosed this in its Performance Improvement Plan (PIP) and Extraordinary Tariff Review Application which was released on Monday and signed by NERC’s Chairman, Mr. Sanusi Garba, and Mr. Dafe Akpeneye, Commissioner, Legal, Licensing and Compliance.
PIP and Capital Expenditure (CAPEX) program is expected to take effect from July 1, 2021 to June 30, 2026.
READ: What to do if your DisCo has not complied with reversed electricity tariff this week
The NERC said the approved upgrades would improve the distribution of power supply by the DisCos citing public hearing scrutiny in its PIP and Extraordinary tariff review applications in a bid to ensure accountability.
The approved CAPEX for Ikeja Electric Plc would be N24.38 billion annually from 2021 to 2026, while for Eko Electricity, it would be N18.75 billion for the same period, totaling N93.76 billion.
The upgrades would be in the areas of existing network capacity, technological enhancements to reduce outages, and the acquisition of tools to improve network performance.
What you should know
Recall Nairametrics reported that a new Extraordinary Tariff Review Applications, 5-year Performance Improvement Plan (PIP) and Capital Expenditure, CAPEX, for the Electricity Distribution Companies (DisCos) was approved by the NERC.
For the Abuja Electricity Distribution Company, AEDC, the company proposed to undertake numerous interventions to improve service delivery to customers. Over the next five years, the proposed interventions will allow AEDC to achieve substantial improvement in service delivery and increase the number of new customers from the current level of 1,214,259 to 3,450,695.
In the more recent months, Nigerians have witnessed significant power supply fluctuations and blackouts, dipping as low as 2, 805 MW last month.
Only a little over a week ago, the Special Adviser to the President on Infrastructure, Mr Ahmad Rufai Zakari faulted the report of the World Bank on the state of the Nigerian Power Sector. Mr Zakari, speaking on behalf of the Federal Government (FG) had referred to the Power Sector Recovery Programme Opinion Research Fact Sheet released by the World Bank as inaccurate.
According to the report, “78% of Nigerians have less than 12 hours daily access of power supply and up to 58% of electricity consumers are unmetered.” The vehement defence by the FG did not also do much to provide reliable data to debunk the World Bank’s numbers. This gaffe, added to the recent power supply statistics in the country make it difficult for the FG’s rejoinder to be believed.
In its rejoinder, the FG referred to the power supply bands allocated for the service reflective tariffs launched in September 2020, in which only 55% of consumers are in bands D and E- which are the bands that receive less than 12 hours of electricity per day, as opposed to the 78% quoted by the World Bank.
Unfortunately, the FG is relying on plans and predictions, rather than the realities of customers in the other bands, who despite paying tariffs for more than 12 hours often have to endure less than that. Perhaps the FG should be reminded that in places like Borno, insurgents have blown up the transmission tower a second time throwing the city into darkness.
Additionally, according to one report, the Nigerian power sector has experienced grid collapse 126 times as of January 2021, not counting the collapse of the grid that again happened in February this year. While the national grid is said to have a production capacity of 12000 MW, supply has careened between a low 2500MW and a high 5000MW on its best day.
In the more recent months, Nigerians have witnessed significant power supply fluctuations and blackouts, dipping as low as 2, 805 MW last month. In March this year, seven power plants including Shiroro, Jebba, Odukpani (NIPP), Geregu I, Afam IV&V, Geregu II (NIPP), and Rivers IPP could not generate up to 720MW of power due to load rejection by DISCOS.
Further, sometime in late April, twelve power plants in Nigeria could not generate 1,609.9 MW of electricity, and as at last month, with continued power outage in many parts of Port Harcourt and Enugu, the Port Harcourt Electricity Distribution Company blamed the blackouts on the explosion that hit TCN’s power station, while in Enugu, the Enugu Electricity Distribution Company blamed theirs on windstorms and downpours.
Does the FG quickly forget too, the recent broadcast by the Senior Special Adviser on Media and Communications to the Minister of Power, Mr Aaron Airtimas, who offered apologies to Nigerians for the power shortages, while explaining that they had been as a result of the gas constraints and water management problems the sector was experiencing? What justification then does Mr Zakari have for debunking the World Bank’s report as false or relying on mere on-paper power supply band allotments when it is obvious that customers have been receiving less than the levels of services they pay for. Complaints about the poor level of power supply not being commensurate to the bands customers are listed as have been lodged at the offices of the DISCOS by many customers, with some attempting to reach the DISCOS via their social media platforms..
Mr Zakari had also called the World Bank out for its position on the unmetered percentage in the country standing at 58%. The Nigerian Electricity Regulatory Commission (NERC) in its own report at the end of H1 2020 revealed that only 40.27% (4,234,759) of the 10,516,090 registered customers had been metered, meaning almost 60% of customers were unmetered as at that time. In a recent statement made by NERC while issuing its Order instructing DISCOS to replace obsolete meters, it admitted that more than 7 million customers were currently unmetered, more than the number in H1 2020.
While the recent numbers evince that the volume of registered customers may equally have risen, with the sparse metering that was done in H2 last year due to the pandemic, a 58% statistic on unmetered customers as provided by the World bank is hardly far from the truth, particularly with local manufacturers exporting to neighbouring African countries under the AfCFTA regime, while there is a paucity of meters in-country.
Perhaps the lack of credible customer data to track the electricity supplied to customers in real time-particularly as most of the customers are unmetered –
is another reason why the FG should not be believed.
The FG should focus on fixing the many problems in the power sector and refrain from its feeble attempt to discredit the World Bank report.