THE Nigerian Electricity Regulatory Commission (NERC) said it would consider the application submitted by the Aba Power Limited Electric (APLE) for extraordinary tariff review.
The NERC’s vice chairman, Musiliu, gave the information on Tuesday, December 10, in Abuja, during a Public Hearing organised by the Commission to review the application submitted by APLE for tariff adjustment.
Electricity tariff hike is often reviewed to factor in exchange rate variables, rising inflation and the cost of gas since the depreciation of the naira has a direct bearing on these costs.
“This hearing is part of our efforts to ensure that any tariff review is fair and reflects the realities on the ground. We will carefully review the submissions made here today before making a final decision,” he said.
APLE is the electricity distribution company of Aba Integrated Power Project licensed by the NERC in 2007 to generate and distribute power from its 141MW power plant.
The company is asking NERC to allow it increase its electricity tariff from N122 per kilowatt hour (kWh) to N240 per kilowatt hour (kWh).
The company periodically procures electricity from the Niger Delta Power Holding Company’s (NDPHC) Alaoji Generation Company under a Power Purchase Agreement (PPA) approved by NERC and sells to all customer classes in the Aba Ring Fence Area (ARFA) comprising nine out of the 17 Local Government Areas of Abia State.
Aba Power has been operating with a tariff approved by NERC in October 2022, hence the request for approval of a tariff to reflect the current macro-economic conditions that affect its operations.
Justifying the need for tariff adjustment in a presentation during the hearing, the Managing Director of Aba Power, Ugo Opiegbe said the NDPHC has increased invoices for its wholesale energy cost to the APLE from the NERC approved PPA contract price of N21/kWh to N136.26/kWh.
This is even as he disclosed that the cost of generation from Geometric Power Aba Limited (GPAL) is now N133.2/kWh, therefore, the need to incorporate the changes in the macroeconomic parameters and indices which affect the quality of service, operation and sustainability of the business.
According to Opiegbe, the utility company was acquired with about N26billion, but about N82billion in investment has been injected since taken over.
He said the company has “integrated its Multi-billion Naira distribution infrastructure in ARFA for improved service, and has successfully bifurcated and rehabilitated over 400km of 11kv lines.”
Others, according to him, include, “construction of 17.5km 33kv line to Nvosi Isiala Ngwa, construction of 41km Ukwa 33kv lines, metering of 560 Nos DSs transformers, construction of 59.74km new 33kv overhead lines, completion of 660 OHL 33kv steel tubular towers including the foundation civil works, and construction of 58.93km 33kv overhead sub-transmission lines.”
Speaking on metering, he said the company has about 158,000 customers, out of which about 58,000 customers have been metered, leaving the unmetered customers at a staggering number of 100,000.
He revealed that plan has however, been concluded by the company to deploy about 15,000 meters monthly in the coming year to close the metering gap.
The company proposed the following: inflation 25 per cent, US Inflation 3.3per cent, exchange rate N1654.4/$, average energy offtake 135mwh, aggregate technical commercial and collection losses 21.26%, annual opex N189.68912 billion, annual meter capex N4.17 billion, annual other capex N1.1486billion, annual revenue requirement N227.0592 billion, cost reflective tariff N240.9, and allowed tariff N240.9.
The ICIR reported that the distribution companies, in July announced tariff increment from N206.80/kilowatts(kWh) to N209.5/kWh for band A customers(those enjoying power up to 20hrs daily).
Earlier in April, the ICIR reported the directive by the Nigerian Electricity Regulatory Commission (NERC) on the immediate upward review of electricity tariff for customers under Band A, a directive affirmed by the Minister of Power, Adebayo Adelabu who had earlier raised concern over the Nigerian government’s unsustainable power sector subsidy
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.