DisCos insist on electricity tariff hike, apply for review of charges

ELEVEN electricity distribution companies (DisCos) have applied for a review of their respective electricity tariffs, the Federal government has disclosed.

The Nigeria Electricity Regulatory Commission (NERC), who disclosed this on Friday, June 14, in a published public notice, said the request for rate review was premised on the need to incorporate changes in macroeconomic parameters like inflation, and other factors affecting the operations and sustainability of the companies.

NERC stated that DisCos’ request for rate review was in pursuant to Section 116 (1) and 2(a&b) of the Electricity Act 2023 and other extant rules.

A recent attempt by some electricity distribution companies to hike tariff from July 1 had elicited condemnation from Nigerians, who are still reeling from the economic squeeze of foreign exchange unification and fuel subsidy removal.

The Nigerian Labour Congress (NLC) had asked the government to shelve the intention, describing it as “insensitive.”

Following the public outcry, the Discos shelved the planned tariff increase, as reported by The ICIR.

However, the increment may still happen, in the light of the NERC notice that the Discos have now applied for a review.

“DisCos would be justified to effect the upward tariff review because there is a template for such review every six months as directed by the multi-year-tariff-order of the NERC,” a power sector governance expert and energy lawyer, Chuks Nwani, told The ICIR.

The regulatory body also stated it would be conducting a rate Case Hearing on the applications, prior to making a ruling, as part of the rule-making process and in the exercise of the powers conferred on it by the Electricity Act.

“Accordingly, the Commission hereby invites the general public for comments on the rate review applications by the distribution licensees. Interested stakeholders are advised to review and take into consideration the excerpts of the Rate Review Applications filed with the Commission by the respective licensees,” NERC stated.




     

     

    The Commission called on members of the public and stakeholders to send their comments or representations before the close of business on July 20, 2023.

    The NERC tariff review process was designed with the intent of undertaking major reviews every five years.

    An extraordinary tariff review is triggered when a Disco requires additional investment beyond the permitted capital expenditure, or when unforeseen operational, legal, or regulatory costs need to be reasonably passed on to consumers.

    Minor reviews are also scheduled every six months to adjust tariffs based on changes in gas prices, foreign exchange rates, generation output, and inflation.

     

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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