THE Nigerian Electricity Regulatory Commission (NERC) has given some distribution companies (Discos) an approval to increase their tariff rates.
The regulator hinged the approval on the provisons of the Electricity Power Sector Reform Act of 2005, which gives a directive for tariff increment every six months, as prescribed by the Multi-Year Tariff Order (MYTO).
The ICIR reports that the increment would also factor in key variables like foreign exchange rate concerns and inflation rates.
The affected Discos, according to NERC, are the Port Harcourt Electricity Distribution Company (PHEDC), Jos Electricity Distribution Company (JEDC), Kano Electricity Distribution Company (KEDC), Kaduna Electricity Distribution Company (KEDC), Jos Electricity Distribution Company (JEDC), Ikeja Electricity Distribution Company (IKEDC) and Ibadan Electricity Distribution Company (IBEDC).
The regulator said the new approval took effect from January 1, 2022 but the new rate was from February 2022.
According to the document titled, ‘This regulatory instrument shall be cited as Multi-Year Tariff Order (MYTO-2022) for Port Harcourt Electricity Distribution Company Plc. (PHED)’, the NERC based the increase on the Performance Improvement Plans of the DisCos and indices, such as gas price, inflation, exchange rate, US inflation rate and available generation capacity.
The Commission noted that the indices with the potential impact on electricity rates were considered.
It added that the indices shall be reviewed every six months to update the tariffs with changes in the indices as applicable in line with the MYTO.
This was contained in the Commission’s Order No: NERC/304/2021, which the NERC Chairman, Sanusi Garba, and Vice Chairman, Musiliu Oseni, signed on December 29, 2021.
The document explained: “Consequently, following the approval of PHED’s PIP on 30th April, 2021, the Commission issued the Multi-Year Tarrif Order, MYTO-2021 Extraordinary Tariff Order effective from 1st July 2021 in consideration on PHED’s CAPEX proposals over a 5-year plan, in line with the approved PIP.
“Accordingly, this MYTO-2022 order restates PHED’s approved 5-year CAPEX and relevant assumptions applied to forecast revenue requirements and applicable tariffs for the period 2021-2026, in line with MYTO Methodology and Regulations Procedure for Electricity Tariff Reviews in the Nigerian Electricity Supply Industry (NESI).”
It is programmed from July 1, 2021 to June 30, 2026.
The document showed that for the PHED (A-Non MD), customers who paid N56.16/kwh in January 2022 will now (February to December 2022) pay N60.67/kwh).
(B Non-MD) customers, who paid N56.64/kwh in January 2022, will now pay N59.64/kwh.
It noted that E- MD2 customers, who paid N50.72/kwh in January 2022, will now (from February 2022) pay N54.22/kwh.
Update: The Regulatory Commission has denied reports that it has approved tariff increase in the power sector. Read the report here.