Aba Power Proposes 163% Tariff Increase Due to Rising Operating Costs

• Aba Power Limited has applied to the Nigerian Electricity Regulatory Commission (NERC) for a 163% tariff increase, citing rising operational costs.
• The proposed tariffs include hikes for various customer bands, with rates set to increase by up to 17.9% from 2024 to 2025.

Aba Power Limited (APLE) has formally applied to the Nigerian Electricity Regulatory Commission (NERC) for a significant increase in electricity tariffs across its franchise areas, citing rising operational costs as the driving factor behind the proposed changes. The company’s Managing Director, Ugo Opiegbe, presented the request on December 10, 2024, explaining that the current tariff is no longer sustainable given the increased power generation and distribution costs.

APLE emphasized that the escalating fuel costs, inflation, and other economic factors have strained its operations. The company stated that these rising expenses necessitate a review of the electricity tariff to ensure continued service delivery and financial sustainability.

Details of the Proposed Tariff Increase

The proposed tariff hikes for different customer categories are as follows:

1. Band A Non-MD (Non-Metered Domestic Customers):
   • Current tariff (2024): N223.12/kWh
   • Proposed tariff (2025): N263.08/kWh
   • Increase: 17.9%
2. Band A-MD1 (Medium-Sized Businesses and Some Residential Customers):
   • Current tariff (2024): N240.09/kWh
   • Proposed tariff (2025): N283.09/kWh
   • Increase: 17.9%
3. Band A-MD2 (Large Businesses and Industrial Users):
   • Current tariff (2024): N245.20/kWh
   • Proposed tariff (2025): N289.11/kWh
   • Increase: 17.9%
4. Other Consumer Categories:
   • Current tariff (2024): N21.74/kWh
   • Proposed tariff (2025): N25.00/kWh

The company explained that the adjustments are necessary to cover the higher electricity generation costs, including the increased fuel prices and other operational expenses. While the proposed increase would significantly raise electricity rates for consumers, APLE maintains that it is essential for the company’s continued ability to provide reliable electricity service.

Context and Consumer Concerns

This proposed tariff hike comes when Nigerians grapple with economic challenges, including inflation and rising living costs. The potential increase has sparked concerns among consumers, especially households and small businesses, about the impact on their electricity bills and overall financial well-being. However, APLE argues that the increase is vital for its operations’ sustainability and avoiding service disruptions.

The request is now under review by NERC, which will decide whether to approve the proposed tariffs. If approved, the new tariffs are expected to take effect in 2025. The company’s proposal highlights the challenges faced by the power sector in Nigeria, where fluctuating costs and economic instability have become persistent obstacles for electricity providers.