The Nigerian Electricity Regulatory Commission(NERC) has halted its planned hike in electricity tariffs supposed to take off today the 1st of April 2020. According to a report by Punch, The NERC had in its December 2019 Minor Review old Multi-Year Tariff Order 2015 that took place on January 4, 2020, intimated the public that electricity will have to start paying more for electricity in Nigeria come April 1st.
Punch says that the different distribution companies had applied with the regulatory commission to review the tariffs of their various end-users. The NERC on Tuesday made it known that there were public hearings that took place at a number of locations in Discos franchise areas spanning from the 25th of February to the 9th of March to consider the feasibility of the applications.
It pointed to the metering gap in the Nigerian electricity supply sector as a major impediment. The metering gap in the sector pegs at about 60 per cent now and the NERC thinks it “is a major impediment to both an immediate tariff review and revenue protection for Discos.”
The NERC also said that many customers of the active 11 distribution companies are willing to pay higher tariffs for electricity but have the condition of guaranteed hours of supply by the Discos, improved quality of power and of course transparent metering.
“There shall be no increase in tariffs of end-use customers on April 1, 2020,” According to the NERC’s new order. The commission said that the December minor review order will remain valid until June 30, 2020, when the commission would issue a new minor review order.
“The Federal Government of Nigeria shall provide tariff support during the transitional period to full revenue recovery ending on June 30, 2021, based on the under-recovery of the revenue requirement determined by the commission,” the NERC stated.
The NERC, however, stated the support for the period will strictly be within the Power Sector Recovery Programme financing plan. It also directed all distribution companies to turn in a concrete plan that is geared towards “full recovery of prudent costs and allowed return on capital by June 30, 2021.”