Federal Government’s (FG) agency for electricity regulation, Nigerian Electricity Regulatory Commission, NERC, has approved a 300 percent (300%) increase in electricity tariff. The increase, which is applicable to only customers under the Band A classification takes effect today.
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Musiliu Oseni, the Vice Chairman of NERC made the announcement in Abuja on Wednesday.
As a result of the approval, power distribution companies, DisCos are allowed to raise electricity tariff from ₦66.00 per kilowatt-hour to ₦225.00 for customers on Band A.
Oseni said these customers represent 15 percent of the 12 million electricity customers in the country.
Furthermore, he said that the commission had also downgraded some customers on Band A to Band B due to non-fulfilment of the required hours of electricity provided by the electricity distribution company.
“The commission sat and reviewed further the application by the distribution companies and have decided that only the 17 percent feeders and less than 15 percent customers will be affected by any rate increase that the commission will ever approve for the DisCos,” Oseni said.
Speaking further, Oseni said “We currently have 800 feeders that are categorised as Band A, but it will now be reduced to under 500. This means that 17 per cent now qualify as Band-A feeders. These feeders only service 15 per cent of total electricity customers connected to the feeders.
“The commission has issued an order which is titled April supplementary order and the commission allows a 235 kilowatt per hour.”
Customers on the other Bands will not be affected by the rate hike.
Bloomberg on Tuesday reported that power companies will be allowed to raise electricity prices, in a bid to attract new investment and reduce the $2.3bn spent on electricity subsidies.
The rate hike is also coming of the heels of Monday’s announcement by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of an increase in the price of natural gas to power.
Electricity tariff order in Nigeria classifies customer into three major clusters, namely: Non-MD, MD-1 and MD-2.
In the same vein, five distinctive bands (A-E) were created to reflect the various service levels and minimum hours of power supply.
- “Band A” are to enjoy daily minimum supply of 20 hours,
- “Band B” minimum of 16 hours
- “Band C” minimum of 12 hours
- “Band D” minimum of 8 hours,
- “Band E” are expected to enjoy minimum daily supply of 4 hours.
Blanket tariff does not apply to all category of customers.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
