NERC begins multiple electricity tariff reviews

The Nigerian Electricity Regulatory Commission (NERC) has opened a 21 day window for comments by stakeholders as it tries to conclude the extraordinary review and the minor review of the Multi Year tariff Order (MYTO) 2020.

According to the notice endorsed by NERC Chairman, Engr. Sanui Garba and published on Monday, the Commission said the process is for the tariffs of the Transmission Company of Nigeria (TCN) and the 11 Distribution Companies (DisCos).

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“Stakeholders and the general public are invited to send their comments to the Commission within

21 days from the date of this publication,” said NERC.

Daily Trust reports that NERC had reviewed the tariff in December 2020 and implemented it in January 2021, causing some level of tariff hike. The implementation was shortly suspended after public outrage and on the ground that the federal government was still consulting with the organised labour.

It is not clear if this review will lead to another tariff hike as its implementation is expected to begin from July and end by December 2021.

However, the NERC notice indicates that the review will be based on changes in inflation (currently 18 percent), foreign exchange (over N400), gas prices ($3.80), available generation capacity (about 5,000MW), and the Capital Expenditure (CAPEX) required to evacuate and distribute the available generation capacity.

The upward trend of these indices, especially the inflation and forex would mean a tariff hike but the government can continue its subsidy to cut the effects on consumers.

The Minister of Power, Engr. Sale Mamman, in a statement in February, said the federal government has been subsidizing electricity supply by the DisCos with N50 billion every month since 2020.

NERC said it held consultations in the first quarter of 2020 to consider the respective five-year Performance Improvement Plans (PIPs) of TCN and DisCos but decisions were not concluded.

With this review, NERC will conclude the extraordinary Tariff Review process and begin the MYTO 2020 minor review for July 2021.