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Consumers oppose Ikeja Electric tariff increase

Ikeja Electricity Distribution Company Headquarters, Lagos

* Planned tariff increment justifiable ─IKEDC Management

* No, we’ll resist the increment, go to court ─JAC, DisCos Customer Rights

Isola Moses | ConsumerConnect

Against the backdrop of the recent directive by the Nigerian Electricity Regulatory Commission (NERC), and subsequent support of the Transmission Company of Nigeria (TCN) to same proposal that 11 electricity Distribution Companies increase power tariffs with effect from April 1, 2020, electricity consumers have disapproved the planned tariff increment by Ikeja Electric (IE), in Lagos.

The consumers disclosed their opinions at the Extraordinary Tariff Review Stakeholders Consultation organised by IE, in Ikeja, Lagos State capital Monday.

The IE power consumers are demanding that 90 percent of customers should be metered before any upward review of tariffs, according to agency report.

The consumers also criticised NERC for “failing to protect the interest of Nigerians” who are still being subjected to manipulative estimated bills by the DisCos.

ConsumerConnect recalls that the 50 percent tariff increase, which is expected to begin from April 1, will raise the average tariff from the current level of N27.30 per kilowatt to N40.95 per kilowatt.

Mr. Sural Fadairo, National President, Energy Consumer Rights and Responsibilities Initiative, at the forum stated that Ikeja Electric should accord priority to metering of all electricity consumers under its network who have suffered from the company’s exploitative estimated billing system amid pervasive darkness instead of seeking a tariff review.

Mr. Fadairo said the DisCos were not following NERC regulations in issuing their estimated bills.

He, therefore, urged the NERC as the power industry regulatory agency to be alive to its all-important responsibility.

Mr. Ayodele Olawoye, Chairman, Joint Action Committee, Electricity Distribution Companies Customer Rights, said the increment would only inflict more pains on Nigerians.

Mr. Olawoye noted that “we are going to resist this increment and we will go to court. 90 percent of customers must be issued pre-paid meters before any talk of tariff increment,” he said.

Likewise, Mr. Adeola Samuel-Ilori, National Coordinator, All Electricity Consumers Protection Forum, held that the increment was uncalled for based on various factors.

“Firstly, it is not yet five years since the last Multi-Year Tariff Order (MYTO) was implemented, which was in February 2016.

“Secondly, many consumers still buy transformers and line materials which are supposed to be purchased by the Distribution Companies (DisCos).

“Thirdly, is efficiency. Going by Section 76 (I) (2) of the Electric Power Sector Reform Act 2005, the law says each licensee must have solved the issue of efficiency, and this has not been done,” Mr. Samuel-Ilori stated.

Mr. Anthony Youdeowei, Chief Executive Officer (CEO), Ikeja Electric, however, said the consultation forum was one of the requirements by NERC before tariff review.

Mr. Youdeowei noted that the proposed increment was aimed at achieving a cost reflective tariff.

He explained that the tariff increment was not only for the DisCos, but for the entire electricity industry and for better service delivery by various levels of the electricity value chain.

According to the proposed new tariff of N40. 95 per kilowatt, he said, the DisCo will get 39 percent, Generation Company (GenCo) will get 49 percent while the Transmission Company gets the remaining 12 percent.

Specifically, the Ikeja Electric CEO maintained that the planned tariff increment was justified because the last Multi-Year Tariff Order (MYTO) was implemented in 2016, when the exchange rate was N198. 97 to a U.S. Dollar.

The exchange rate to a Dollar has increased to N309. 97 now, he said.

He said that inflation rate, which was 8.8 percent in 2016 had risen to 11.3 percent (now 12.13 percent as of January 2020).

Youdeowei also stressed that most of the equipment used for power distribution and maintenance were bought abroad.

As regards the Performance Improvement Plan of the company, he said IE was committed to metering all its customers by 2022 and reducing Aggregate Technical, Commercial and Collection (ATC&C) losses to 8.8 percent by 2024.

He added that Ikeja Electric would invest in strategic areas that would guarantee reliable network, quality voltage, energy accounting, improve maintenance turnaround time, and enhance the apparently flagging consumer experience with the DisCo.

Meanwhile, Prof. James Momoh, NERC Chairman, represented by Mr. Friday Sule, Zonal Officer, North Central, NERC, has said engagement of customers is very critical before any tariff review.

Prof. Momoh explained that such a forum is an opportunity for stakeholders to ask the DisCo what it is willing to do for them.

NERC would continue to ensure that all stakeholders adhere to the regulations guiding the operations in the power sector, he assured.

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