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FX crisis could push electricity tariff up as FG plans review in December




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THE foreign exchange crisis currently confronting the country could see a marginal increase in electricity tariff, The ICIR’s findings have shown.

Nigeria has been facing an unending crisis with foreign exchange, as analysts say floating the naira would determine its real value rather than subsidising import which the Central Bank of Nigeria (CBN) has been doing.

The Electricity Power Sector Reform Act of 2005 has directed a review of tariff bi-annually to reflect market realities and sustain market confidence.

The Nigerian Electricity Regulatory Commission, (NERC) normally considers key variables before effecting a tariff hike.

The variables for consideration before the tariff increase is effected by the regulator include foreign exchange, inflation and wholesale cost of gas.

A power governance expert and energy lawyer Chuks Nwani told The ICIR that minor tariff reviews are necessary components to drive a credible electricity market.

“There have been about the third tariff review in a row that the regulator NERC tries to effect. For us to have a credible electricity market, we must play by the rules and be consistent about it,” he said.

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Nwani noted that the CBN has been following up with the commitments of the distribution companies to ensure an efficient payment recovery system.

“Discos’ principal account is being monitored by the (CBN) through the commercial banks to ensure proper tracking of electricity funds,” he disclosed.

This, he said, would enable the sustainability of the various interventions in the power sector and ensure an effective recovery mechanism.

According to the power expert, the sector would attract much-needed investments beyond the government’s subsidy if it operates according to the guiding law – the Electricity Power Sector Reform Act 2005.

Beyond tarrif hike, some power sector stakeholders want NERC to pay attention to customer satisfaction on consumer-related issues in the power sector.

President of the association of power consumers Princewill Okorie told The ICIR that forum offices set up by NERC to address consumer-related issues especially has not been living up to expectations in consumer rights education.

In the face of the increase in tariff in the country, Okorie said, “Our effort in analysing bills given to communities and identifying discrepancies and unlawful fraudulent billing methods and demanding that NERC Forum Office Owerri address them is provoking members of the NERC Forum Owerri, who are bent on covering up the wrongs of the Discos.”

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Okorie said NERC officials in the region lack knowledge of Consumer Protection and Licensee Performance Standards of Electric Power Sector Reform Act 2005.

A former chairman of NERC Sam Amadi also told The ICIR that the regulator beyond tariff increase should explore other dynamic ways of solving numerous problems confronting the sector.

“The increment is partly as a result of technical and commercial issues, but attention should be given to other sectoral concerns confronting the sector,” he said.

Also, Kunle Kola Olubiyo said beyond the tariff review, there must be a holistic look at the general performances of the power sector.

He admitted that some of the progress recorded in the sector had been overshadowed by huge failure.

“As we speak today, Nigeria does not have accurate customer data for the electricity industry which is conservatively at eight million and 12 million end-users.

He said that data is crucial to metering of registered properties which could have improved the liquidity in the sector for improved services, and also allowed customers to invest in payment refunds.

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