Power firms are pushing for a fresh 100 percent increase
in electricity tariff, the second in six months, Daily Trust
investigations have shown.
The electricity distribution companies (DisCos) raised
tariff by over 45 percent in February.
The DisCos had written to the regulatory authority, the
Nigerian Electricity Regulatory Commission (NERC)
demanding hike in tariff from the current average of N24
per kilowatt (for residential consumers) to N50 per
kilowatt.
However, the Director General of the Manufacturers
Association of Nigeria (MAN), Mr Remi Ogunmefun, told
Daily Trust in Lagos that his association had opposed
that move in writing to the NERC.
The NERC announced the 45 percent hike in electricity
tariff with effect from February 1, 2016, and said
theincrease would enhance service delivery and customer
satisfaction.
But since the increment, the electricity supply across the
country has dropped affecting both household and
commercial activities.
A source at the NERC confirmed to Daily Trust that the
DisCos had written a letter seeking for the increase.
"When MAN got wind of the power firms' letter seeking
for the 100 percent hike, they equally wrote a letter
countering the DisCos claims," the source said.
The spokesperson of NERC, Mike Faloseyi, when
contacted on Sunday, said he was not aware of the
proposed hike but promised to get back to our reporter.
When Daily Trust contacted him yesterday, he said he
was in a meeting but would consult with the commission
chairman and get back to us. But he never did.
Power firms justify tariff
Daily Trust observed that in an attempt to justify its
proposed electricity hike, the umbrella body for DisCos,
the Association of Nigerian Electricity Distributors (ANED)
has been running advertisements in about 10 national
dailies in the last five weeks highlighting "basic electricity
facts the public must know."
The publicity messages, ANED said, were meant to clarify
the position of 11 power distribution companies in the
power sector value chain.
Some of the paid publications carried messages such as:
"Electricity is a commodity with a price that must be
paid."
"The average residential tariff of N24.12/kWh is still
significantly cheaper than self-generated power at a cost
estimated to be in excess of N50/kWh," among others.
ANED on its website also said the DisCos had a five-year
performance commitment to reduce power interruption,
extend the distribution network, increase metering and
improve the quality of customer service.
One other message by the association reads: "DisCo
operators only collect 24 percent of the tariff revenues.
The balance goes upstream to transmission, generation
and other industry stakeholders (CBN, NERC, NBET, etc)."
The association said without a tariff that allowed the
operators to recover their cost of operation, there would
be no increased generation or improved service delivery.
On the recent vandalism, ANED in its most recent series
of paid publicity said electricity customers should blame
vandals and not the DisCos as "we cannot give what we
do not have."
MAN rejects fresh tariff
Manufacturers Association of Nigeria (MAN) confirmed
to Daily Trust that it recently wrote the NERC to express
displeasure over moves to increase electricity tariff in the
country.
Mr. Ogunmefun said the letter to NERC was a
continuation of MAN's opposition to intense lobbying by
electricity distribution companies to increase electricity
tariff without recourse to procedures and rules.
He wondered why the DisCos were so anxious to
introduce a new tariff regime when the ongoing tariff
would only lapse in 2017.
"We have an agreement with the electricity distribution
companies on MYTO 2 which states that the current
electricity tariff would terminate in 2017.
"We have consistently challenged the moves by the
distribution companies to hike tariff for manufacturers
outside the MYTO 2," he said.
Ogunmefun said, "We filed a suit at the Federal High
Court Lagos which has since given injunction stopping
the electricity distribution companies from going ahead
to tamper with the current electricity tariff.
"We will not relent in our opposition to the moves by
power companies to increase electricity tariff outside the
MYTO 2."
He said the manufacturing sector alone contributed over
80 percent of the revenue of the power distribution
companies as such there was no justification to stultify
the sector with arbitrary tariff regime.
He said Nigeria was battling with infrastructure gaps and
frustrating manufacturers with high electricity tariff would
go a long way in killing ease of doing business in the
country.
"To imagine an increase in electricity tariff with the
already frustrating state of infrastructure in the country is
a mortal blow on the manufacturing sector," he said.
Civil society kicks
The Nigerian Electricity Consumers Advocacy Network
(NECAN), a consumer group earlier initiated by NERC,
has frowned on the planned increase while accusing the
commission of complicity.
NECAN President, Tomi Akingbogun, told our reporter
yesterday they confirmed the proposed increment with
MAN and that they would take up the issue with the
minister of power.
"We totally condemn it because it is dangerous for our
economy at a point when the DisCos are not supplying
any electricity," he said.
He said any fresh increase "is quite dangerous for this
economy because it is like inciting the people against the
government; it means the people are being pushed to the
wall.
"The economy is almost nearing a recession. The
increment if done will be 200 percent in two years. We
believe the minister will not approve such and for those
who are having such thoughts including the owners of
the DisCos, are they really in Nigeria?"
Akingbogun said "Even Ghana just complained of poor
power supply because of the vandalism here in Nigeria.
We are not having enough power now. This is the fourth
time they will be asking for tariff rise. When they first
asked for 100 percent, NERC gave them 50 percent and it
happened the second time.
"NERC should have thrown their request out but it is
better we don't wait for NERC because they may not say
anything to the advantage of the public. In the past, they
aligned with the GenCos, that is why we, as the voice of
the public, said this must not be done," he said.
Consumers' reaction
Individual electricity consumers across Abuja and
environs also expressed their dismay over the new
proposal. Mr Nwigwe Obi who runs a welding venture in
Nyanya, Abuja said it would not work as Nigerians would
resist such moves at all cost.
"We have not even gotten over that of February 1, 2016
when it rose to over 45%. This time, government should
know that everybody will rise up in protest because it is
too much," he said.
Malam Haliru Musa, a cold room operator in Mararaba,
Nasarawa state said the DisCos should not think that way
because the power supply situation has been bad in the
past months.
"The DisCos won't think of that because vandalism has
crippled power and they have not supplied meters to
customers. Nobody will pay if they attempt to even
increase a little," he said.
Mr Odoh Vincent, a resident of Lugbe, Abuja said "with
the last increase, my estimated bill rose from an average
N3,000 monthly to about N7,000. The DisCos promised
to provide meters after the February increase but we have
not seen any yet."
DisCos response
When contacted yesterday, the spokesperson of ANED,
Barrister Sunday Oduntan said in a text message that it
was not true. "No. That is not true. Call me later,"
Oduntan said. He didn't answer subsequent calls or
respond to text messages sent to his mobile phone.
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