NERC To Increase Electricity Tariff In June 1
Despite the epileptic power supply in the country, the Nigerian Electricity Regulatory Commission (NERC) has announced plans to increase electricity tariff.
*Prepaid Metre
Dr. Sam Amadi, NERC Chairman who made this known on Monday in Abuja, revealed that the increment is expected to commence by June 1. He said the decision was propelled by the review of the Multi Year Tariff Order (MYTO) for 2014.
“The review has reduced fixed price charge component of the tariff” he said.
Amadi, who explained the impact of the review used the FCT as an example, saying: Abuja Electricity Distribution Company’s R2 customers who had been paying, N13.75 per unit will pay N14.90, noting that the fixed charge remains unchanged.
According to him, the above breakdown shows an increment of N1.15k for customers in the R2 district. He said that the full details of the review would be made known on the NERC website.
Amadi while speaking on some of the benefits of the just concluded important transformation in tariff review, he said: “Whilst MYTO in 2012 had projected a 13 per cent inflation rate, it was by March 30, at 7.8 per cent, less than 5.2per cent of the projection; exchange rate of $1 to N178 from CBN data was also less as at March 30 to N157.30 per $1, 11.6per cent less than projected.”
He said the review will further help in reducing wholesale tariff payable to generation companies (Gencos), adding that starting from June 1, with increased generation capacity and favourable economic indices, tariff cost will tremendously fall.
“Many customers by 1st June should be paying a fixed charge (FC) of about N1,500 but the adjustment has resulted in a decrease in that the fixed charge will not change but will remain at N750” Amadi said. “What we will see is that most of the consumers did not have any increase in their EC apart from Residential Two (R2) customers that have N1 increase in some places. So instead of having a much bigger Energy Charge (EC) increase that was published for 2014 MYTO since 2012, we now have the same fixed charge of N750 from the supposed N1500 which means a huge reduction and then a slight increase of about N1 or so for only R2 customers.”
The chairman also noted that the R2 customers in Ikeja Distribution Company (Disco) are much and because of that the cost is cheaper, adding that when they calculated the average with the cost of price, their energy charge came down lower. He pointed out that though wholesale generation cost is reduced, transmission and distribution component of the tariff is high resulting in the slight increase in the Energy Cost for most R2 customers.
The MYTO (Multi-Year Tariff Order) offers a 15 year tariff path for the Nigerian Electricity Supply Industry. It helps map out the basis and pricing principles by which the tariff of different groups of consumers are fixed or determined. It also helps ascertain the load allocation to different electricity distribution companies as well as the closest value chain to consumers. The MYTO is majorly reviewed every five years especially June of every year. NERC executes a minor review in order to determine market details.
Source: Legit.ng
