- DisCos have yet to get the approval of NERC to hike tariffs.
- Inflation rate is 22.41 per cent and may hit 30 per cent by the end of the month.
A few hours ago, the DisCos clarified that they had yet to get the Nigerian Electricity Regulatory Commission’s (NERC) approval to hike tariffs. Also, the Abuja Electricity Distribution Company (AEDC) backtracked on its earlier announcement of a tariff increase barely 18 hours after it issued a notification.
AEDC, in a public announcement to its customers, urged them to ignore its previous announcement of an upward tariffs review. The company noted that NERC was yet to approve the increase.
The MYTO provides a tariff path for the electricity industry, with biannual minor reviews to take into account the impact of changes in a limited number of parameters, specifically inflation, dollar exchange rate to naira, natural gas price and available generation capacity, and major reviews every five years.
The proposed increase is coming despite the fact that operators have yet to be able to meet the threshold of supplying at least 5,000 megawatts a year after signing contracts with NERC.
NERC’s current Service Based Tariff (SBT) was benchmarked on an exchange rate of N441/$ and inflation of 16.97 per cent. Currently, the inflation rate is 22.41 per cent, a figure that experts say may hit 30 per cent by the end of the month, given the floating of the naira and petrol subsidy removal.
Many experts seem to think that the DisCos are taking advantage of their monopoly privileges and that the timing and rate of tariff changes should be reviewed in the interest of social stability.