We want latest power tariff reviews reversed because they are seemingly unjustified

Nigerians who said both the Federal Government and the electricity distribution companies (DisCos) are taking them for granted with the latest clandestine upward review of electricity tariffs are right. Tariffs should not be fixed under the table, especially in a situation where parameters have been set for such reviews. Moreover, it an admission on the part of the regulatory agency that the tariffs are not justified if that agency abdicates the responsibility of making the new tariff regime known to the public to the very organisations it is superintending.

As a matter of fact, to show the extent of the secrecy that attended the latest tariff reviews, some people said it took effect in December, last year, while others claimed it was the DisCos’ new year gift to electricity consumers. Even the Abuja Electricity Distribution Company, which confirmed the tariff hike only did so on Twitter, and in response to a Twitter user’s request. It explained that it was based on the order of the Nigerian Electricity Regulatory Commission (NERC). “Good day, please be informed that the increase in tariff is in compliance with NERC order,” the DisCo stated.

This is wrong.

Tariff increases in the power sector have conditions precedent stipulated in the

Multi-Year Tariff Order (MYTO). As Prof Yemi Oke, a legal consultant and energy law advisor noted, “Every increase in electricity tariff must follow a Multi-Year Tariff Order. The year 2020 was the last order which speculated a bi-annual review to determine tariff increase. The MYTO must be reviewed…after following laid-down rules, including wide consultations. All these have not been done”.

However, unlike some stakeholders who believe the tariff increases were uncalled-for because of the harsh economic situation in the country, we are opposed to the increase because it did not seem to follow this due process. Consumers hardly support any increase in tax or tariffs. The only increase that is popular among workers is upward review of wages. But, the fact of the matter is that the electricity companies are also in business to make profit. Just like the electricity consumers, they too have bills to pick and which they must settle to remain in business. They are not for charity. And they have nowhere else to look for money to settle the bills except through the settlement of bills by their customers.

As a matter of fact, but for the Federal Government that is still subsidising the sector, it is doubtful if the various tariff regimes they have been implementing these past years would have been sustainable.

But then, it is difficult to determine appropriate pricing given the present situation of a metering gap of about seven million. This is a serious matter in a sector that has been privatised since 2013. And, as a matter of fact, this is the basic requirement in any sector where payment for goods or services is not to be determined by rule of the thumb. NERC should feel more concerned about this than tariff review based on guesstimates. Indeed, that should have been the starting point.

The government itself saw this as a major challenge, hence it came up with the idea of free meters to consumers. Unfortunately, it allowed the free meter project to run simultaneously with the prepaid meters that the DisCos sell to their customers. This gave room to all manner of shady deals, as many power consumers neither got the free meters free nor got the ones offered by the DisCos at the official price. The resultant fiasco is what has left us still with about seven million consumers without prepaid meters.

Thus, estimated or crazy bills are still prevalent in the sector, with the DisCos spreading the money for power consumed by those tapping power illegally (or those they could not reach for one reason or the other), among those without prepaid meters, or those with the old meters, irrespective of whether their meters are working or not. What we thus have is a situation of a narrow market which in turn begets arbitrary high bills.

Another metering issue has to do with electricity consumers with expired meters. In the first place, most consumers do not know that their meters have expiry dates. The prevailing practice is that DisCos still ask such consumers to pay for replacement of the so-called expired meters, whereas the meters belong to the DisCos. Again, many electricity consumers have had cause to complain that the new meters run unusually faster.

These are germane issues that NERC as an impartial regulator ought to look into and not run to gift the DisCos approval for unjustified tariff reviews. The power supply in the country does not support any upward review of tariffs. What we are saying is that the process for tariff reviews should be transparent; it is too opaque the way it is. That it has become a conspicuous practice of the DisCos make matters worse. So, let NERC wake up to its responsibilities. Its latest tariff reviews give the impression that the council’s sympathy lies more with the DisCos. This should not be. What the situation calls for is a balancing act.

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