Nigerian DisCos’ secret power tariff hike ‘a perfect robbery’ –Consumers

*Several electricity consumers have condemned the underhand, unannounced increments in power tariffs, and called for improved regulatory interventions in the electricity Distribution Companies’ latest hike in rates in view of the harsh socio-economic realities in Nigeria

Isola Moses | ConsumerConnect

Nigerian electricity Distribution Companies (DisCos) recently effected an unannounced increase in power tariffs for electricity in the country.

ConsumerConnect reports that most of the 11 DisCos in the country jacked up the tariffs without any advance knowledge by consumers, several users only discovered the development at the point of loading their purchased  electricity tokens.

Checks with a number of power tariffs vendors indicated that some of them even were unaware of the DisCos’ move until their customers came complaining about the changes, especially over 14 units of token from the recent 17 units for his tariff band for N1,000 worth of electricity supply from the Ikeja Electric (IKEDC).

IKEDC is a power distribution company in Lagos State, which several consumers regard as the biggest but most ‘exploitative’ and ‘irresponsible’ DisCo in Nigeria, according to report.

An electricity token recharge vendor, who simply identified herself as Esther, in Ogba area of Ikeja, Lagos, recently disclosed that her Manager informed her of the secret hike in power tariffs hours earlier.

Meanwhile, some have kicked against the move, and described the quiet action of the DisCos as “a perfect robbery” amidst the harsh economic realities in Nigeria currently.

Electricity consumers’ reactions

Reacting to the price hike, Mr. Oye Sola, a resident of highbrow estate in Lagos State, lamented the sudden increase in electricity tariffs, reports The Punch.

Sola was quoted to have stated that “electricity tariff is now N72.2 per unit.

Another price hike from N66; I suspect they are going to N100.

“A higher price for poorer services.”

Ola Busari, another power consumer with the Ikeja Electric, said: “They are just milking us. This is a perfect robbery.

“DisCos need to be checked.

Olojede, a Lagos resident, commented on his experience, that “they increased prices without informing us.

“There was no official communication to us as our estate representatives.”

What NERC’s Multi-Year Tariff Order stipulates

However, the Nigerian Electricity Regulatory Commission (NERC), in its Multi-Year Tariff Order (MYTO) provides a 15-year tariff path for the Nigeria Electricity Supply Industry with limited minor reviews each year.

The regulatory Commission’s MYTO stated that reviews are in the light of changes in a limited number of parameters, such as inflation, interest rates, exchange rates and generation capacity, and major reviews every five years when all of the inputs were reviewed with the stakeholders, including the consumers.

Regulator didn’t announce tariff increments, say stakeholders

In regard to how the DisCos effected the hidden increments in power tariffs, report indicates the Commission did not announce the hike tariff hike, as claimed by a DisCo Wednesday, January 4, 2023.

Oyibo Ediri, Twitter user, also accused the Abuja Electricity Distribution Company (AEDC) of quietly increasing the tariffs December last year.

Ediri claimed that the company jacked up the rate for his category of non-Maximum Demand (MD) electricity consumption by N12.65.

He remarked that “AEDC has quietly increased the cost of electricity.

“Cost increased from N57.55 in December to N68.2 for tariff band A non-MD.”

The consumer also said, “No official statement from @aedcelectricity or @NERCNG on the increase.

“These people won’t stop to fleece us.”

In the DisCo’s reply to Ediri’s tweet, the AEDC, via its verified official Twitter handle @aedcelectricity, explained that the tariff hike was based on the order of NERC.

It stated: “Good day, please be informed that the increase in Tariff is in compliance with NERC order.”

However, in his reaction to the response of AEDC, the electricity consumer asked the power firm to provide the current rates approved by the NERC.

He wrote: “Kindly make the current rates available, as ordered by @NERCNG. Thank you.”

In support of Ediri, certain Justin David, another Twitter user, as well reacted to the request for publication of NERC-approved rates, stated: “We await their response.”

But the Abuja-based DisCo did not make any further comment nor did it reply to the requests of the power consumers, report noted.

Whereas the response could not be obtained from the power regulator as of Wednesday,  NERC officials reportedly, did not immediately respond to calls and text messages seeking clarification on the development.

Nevertheless, NERC information on the regulator’s Web site, explained that one of the primary functions of the Commission as contained in Section 32 (d) of the Electric Power Sector Reform Act 2005, is to ensure that the prices charged by licencees were fair to customers and sufficient to allow the licencees to finance their activities and obtain reasonable profit for efficient operations.

On the objective of MYTO

It stated further that “pursuant to the authority given under Section 76 of the EPSR Act 2005, the Commission established a methodology for determining electricity tariff in the Nigerian Electricity Supply Industry, and subsequently issued a tariff order called the Multi-Year Tariff Order that sets out tariffs for the generation, transmission and distribution of electricity in Nigeria.”

The NERC said: “The purpose of the MYTO is to set cost-reflective tariffs which will allow the power sector to be properly funded and functional.

“It provides a 15-year tariff path for the NESI with limited minor reviews each year in the light of changes in a limited number of parameters (such as inflation, interest rates, exchange rates and generation capacity) and major reviews every five years, when all of the inputs are reviewed with the stakeholders.”

Meanwhile, the tariff increase was first observed on the Tariff Band A non-MD, which was increased from N57.55 per unit in December to N68.2 per unit, amounting to about 19 percent increase in tariff.

Reacting to the development in the power sector of the Nigerian economy, Uket Obonga,  National Secretary of Nigeria Electricity Consumer Advocacy Network, confirmed the increase in tariffs, but stated that it was in line with the MYTO.

Obonga, “they’re (DisCos) are transitioning to the new tariff regime that takes effect from January.

“On January 1 this year, around 4p.m., I had over 300 units in my meter, but to confirm whether there is an increment, I had to buy some units online.”

The consumer advocate said: “I bought units of N2,000, which is supposed to be about 26 or 27 units, but I saw about 21 units, which is confirmation that there is a tariff increase according to the current MYTO.

“They moved into a new tariff regime on January 1. But there have been other arbitrary increments outside the MYTO regime. “However, the one that took effect now is based on the MYTO, as captured in the MYTO 2020 order.”

We adjust rates every 6 months due to Forex: NERC Chair

Commenting on the development, Sanusi Garba, Chairman of NERC, at a media briefing, was quoted to have stated that “we will adjust the rate every six months to take care of the Foreign Exchange component of costs, and also inflation. “This is absolutely a very straightforward thing,”

Garba noted although the Chairman the rate might not necessarily be an upward review, as the national currency, Naira, continues to depreciate over time.

The spokespersons for Eko Electricity (EKEDC) Ikeja Electric, and Ibadan electricity Distribution Company (IBEDC), Godwin Idemudia, Ayeni Akinola, and Busolami Tunwase, respectively, declined to comment on the matter latest tariff increments.

They directed any inquiries to the Association of Nigerian Electricity Distributors (ANED).

Likewise, a response to an SMS forwarded to Sunday Oduntan, Spokesperson of ANED, was still being expected as of press time, report said.

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