The Nigerian Electricity Regulatory Commission (NERC) has said that its recent minor tariff review has no immediate impact on end-user tariffs.
The spokesman for the commission, Mr Usman Arabi, explained in a statement in Abuja that the order was meant to establish the impact of the external macroeconomic parameters and costs outside the control of the utilities in 2019 and projections for 2020.
He said the macroeconomic indices taken into consideration to conclude the exercise included rate of inflation, foreign exchange, gas price and volume of available electricity
“The order has further prescribed minimum market remittance threshold payable by the 11 Electricity Distribution Companies (DisCos) and the projected tariff path until 2021.
“However, where actual end-user tariffs are likely to be impacted by the review, the required public and stakeholders consultations shall be implemented.
“This is in line with requirements of the Electric Power Sector Reform Act and Business Rules of the Commission,” he said.
Arabi also said the commission’s attention was aware of reports that an immediate increase in end-user electricity tariffs had been approved by NERC.
He said the Electric Power Sector Reform Act provided that the commission should determine and periodically review electricity tariffs charged by the DisCos.
Arabi said the act was to provide an opportunity for utilities to recover efficient costs of operation and a reasonable return on investment.
Arabi said the current tariff methodology adopted by the commission provides for a determination of a tariff trajectory over a five-year planning horizon and biannual minor tariff reviews.
“The commission took into account the impact of inflation, rate of foreign exchange, gas prices and energy available to consumers,’’ he said.
It would be recalled that NERC had on January 4 published new tariffs for the different DisCos and categories of customers.
The commission said the order super-ceded the earlier one issued on the subject matter, and “the new tariff regime takes effect from Jan. 1, 2020.’’
NERC noted that the order had taken into consideration other actual changes in relevant macroeconomic variables and available generation capacity as at October 31, 2019.
The commission said the order was in line with updating of the Multi-Year Tariff Order 2015 and the Remittance Order 2019.
NAN
