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COVID-19: NERC extends new electricity tariff order date to June 30
THE National Electricity Regulatory Commission (NERC) on Tuesday made a temporary U-turn on the date it initially set for a new electricity tariff to take effect.
The NERC had earlier issued a directive for the commencement of new tariff on 1 April, 2020 but it stated in a new order with reference number: NERC/198/2020 “that due to complaints from the end-use customers such as poor service delivery, inadequate provision of prepaid meters, hours of guaranteed supply and the COVID-19 pandemic, the old date set at tomorrow is no longer valid.”
The order was titled: Order on the Transition to Cost Reflective Tariffs in the Nigerian Electricity Supply Industry.
As a result, the NERC had directed the 11 Distribution Companies (DisCos) to present a comprehensive plan to realise the revenue requirements as well as strategies to provide Nigerians with stable power before June 30, 2021.
“The orders of the commission (Order N0: NERC/GL/184/2019 to NERC/GL/184/2019) titled ‘The December 2019 Minor Review of Multi-Year Tariff Order (MYTO) 2015 and Minimum Remittance Order for the Year 2020’ shall remain in force until 30 June, 2020 when a new Minor Review Order shall be issued by the commission,” NERC stated in a document, sighted by The ICIR.
The document was jointly signed by James Momoh, its Chairman and Dafe Akpeneye, the Commissioner, Legal, Licensing and Compliance.
“There shall be no increase in tariffs of end-use customers on 1 April, 2020,” the NERC said.
The NERC said it recognises the economic impact of the global pandemic mostly on Nigerians and why it should be considered in the new directive.
The commission also disclosed that henceforth, the future tariff for customers would be determined after consultations between DisCos and customers clusters, with firm commitments on rates and quality of service.
The NERC further ordered DisCos to disaggregate their service areas otherwise known as customer base in accordance with the quality of service delivered.
It said the DisCos are expected to also provide smart meters to the customers such that the meters could send real-time or close to real-life electricity usage data to the commission.
The orders read in part: “All DisCos are hereby directed to submit a detailed plan for the attainment of full recovery of prudent costs and allowed return on capital (revenue requirement) by 30 June 2021. The revenue recovery and financial sustainability plans shall be submitted to the commission no later than 21 April 2020. The plans shall include a path, with timeliness, for transiting customers to a higher quality of service.
“All DisCos are hereby directed to submit, no later than 21 April, 2020, revised performance improvement plans based on the key objective of improvement in service for end-use customers and transiting to full revenue recovery. The approved plans shall form the basis for future tariff reviews and full cost recovery.”
“All future tariff review shall be on the basis of consultations between the DisCos and customer clusters with firm commitments on rates and quality of service. The service level compact shall include a compensation mechanism for end-use customers to address the DisCos’s failure events to deliver on performance targets.”
However, the Commission announced plans by the Federal Government to provide tariff support during the transitional period to the full revenue recovery target fixed at 30 June, 2021.
It pledged to fix all issues of concern regarding financial records of all DisCos arising from tariff-related deficits as represented and payables to the Nigerian Bulk Electricity Trading Plc (NBET) and the market operator.