TheNewsGuru

Tag: NERC

  • Real reason NERC ordered increase in prices of prepaid meters

    Real reason NERC ordered increase in prices of prepaid meters

    The Nigerian Electricity Regulatory Commission (NERC) has approved an increase in the price of electricity pre-paid meters in the country.

    This is contained in a NERC ‘order’ signed on Tuesday by its Chairman, Mr Sanusi Garba and the Commissioner, Legal, Licensing & Compliance,  Mr Dafe Akpeneye obtained by newsmen on Wednesday in Abuja.

    The commission, in the order said that a single phase pre paid meter would now cost N81,975.16 from the N58,661.69 it was previously while three phase pre paid meters would cost N143,836.10 from N109,684.36.

    It said that “significant changes in macroeconomic indicators, such as inflation and changes in the foreign exchange rates have necessitated a review of the regulated rates for MAP meters.

    The commission also stated that the approved meter prices were exclusive of the 7.5 per cent Value Added Tax (VAT).

    It said the new price regime was to ensure a fair and reasonable pricing of meters to both MAPs and end-use customers.

    “Ensure Meter Assets Programme (MAP)’s ability to recover reasonable costs associated with meter procurement and maintenance while ensuring that their pricing structure allows for a viable return on investment.

    “Evaluate the affordability of meter services for consumers, aiming to prevent excessive pricing that could burden end-users. Ensure that MAPs are able to provide meters to end-use customers in the prevailing economic realities,” it stated.

  • Tariff increase: Discos request for rate review – FG

    Tariff increase: Discos request for rate review – FG

    Eleven successor electricity companies have applied for a review of their respective electricity tariffs, the Federal Government has disclosed.

    Disclosing this through a notice published by the Nigeria Electricity Regulatory Commission (NERC) on Friday, the Federal Government said the request for rate review is premised on the need to incorporate changes in macroeconomic parameters and other factors affecting the quality of service, operations and sustainability of the companies.

    In the notice, NERC stated that Discos request for rate review is in pursuant to Section 116 (1) and 2 (a&b) of the Electricity Act 2023 and other extant rules.

    A recent attempt by some electricity distribution companies to hike tariffs from July 1 had caused uproar and met strong resistance from Nigerians.

    The Nigerian Labour Congress (NLC) had asked the government to shelve plans aimed at increasing electricity tariffs in the country, saying it was insensitive and callous to effect hike in power tariffs when consumers are still grappling with the hardship caused by the removal of the petrol subsidy.

    It appeared the public outcry worked as it was observed that the Discos shelved the planned tariff increase on July 1.

    However, the increase may still happen with the Thursday notice by NERC that the Discos have now applied for rate review.

    The regulatory body also stated that it will conduct a Rate Case Hearing on the applications prior to making a ruling as part of the rule-making process and in the exercise of the powers conferred by the Electricity Act.

    Access reaching further
    “Accordingly, the Commission hereby invites the general public for comments on the rate review applications by the distribution licensees. Interested stakeholders are advised to review and take into consideration the excerpts of the Rate Review Applications filed with the Commission by the respective licensees,” NERC stated.

    The Commission called on all members of the public and stakeholders to send their comments or representations before the close of business on 20th July 2023.

    The NERC tariff review process was designed with the intent of undertaking major reviews every five years.

    Additionally, an extraordinary tariff review is triggered when a Disco requires additional investment beyond the permitted capital expenditure, or when unforeseen operational, legal, or regulatory costs need to be reasonably passed on to consumers.

    Minor reviews are also scheduled every six months to adjust tariffs based on changes in gas prices, foreign exchange rates, generation output, and inflation.

    In the rate review application of one of the Discos, Ikeja Electricity Distribution Company, it stated that the tariffs are consistently falling below cost-reflective levels because the parameters are not aligned with the current reality of the business putting pressure on Discos and government to subsidize the tariff gaps.

    This, it added, undermines the Discos’ ability to fulfill their obligations under the Performance Agreements and Vesting Contract and exacerbates the liquidity challenges in the electricity sector.

    Also, Abuja Electricity Distribution Company, said it requests that the Commission take into account the amended end-user rate since it represents business realities for continuity and sustainability.

  • Manufacturers kick against impending electricity tariff hike

    Manufacturers kick against impending electricity tariff hike

    The Manufacturers Association of Nigeria (MAN) has described the plans to increase electricity tariff from July 1 as outrageous.

    The association said the real sector was currently uncompetitive from the high prices used to generate power from alternative sources.

    Mr Segun Ajayi-Kadir, Director-General, MAN, made this known in an interview on Friday in Lagos.

    Recall that the Nigerian Electricity Regulatory Commission (NERC) said the increase was in response to the rise of the pump price of premium motor spirit (PMS), the rise in inflation rate which was  at 22.41 per cent, and a shift in the exchange rate from N441 to N750.

    Ajayi-Kadir said a 40 per cent tariff increase at this time would engender higher costs of production, lower profit margin, manufacturing activities paralysis, lower revenue remittances to government among others.

    He stated that the absence of stable, effective and fairly priced electricity supply in Nigeria had been a long-standing challenge  for manufacturers which compelled them to supplement with alternative energy sources.

    Regrettably, he noted that the available alternative energy sources such as diesel had become exorbitantly expensive.

    The MAN director general said that manufacturers spent at least N144.5 billion on sourcing alternative energy in 2022, up from N77.22 billion in 2021, translating to 87 per cent increase in the cost of access to alternative energy sources.

    He said  the fact that government itself was owing N75 billion in unpaid electricity bill was indicative of how burdensome the cost of electricity had become.

    “Already, we have power constituting between 28-40 per cent in the cost structure of manufacturing industries.

    “You can imagine the impact on manufacturing industries that are energy-intensive such as metal processing, heavy machinery, and chemicals manufacturing.

    “A spike in the electricity tariff will erode the profit margin of the manufacturers and reduce their ability to expand operations and create new jobs.

    “Manufacturers will ultimately pass on the additional cost to the consumers of their products and this will increase the cost of the products in the market and complicate the rising inflation rate in the country.

    “Also, the sector’s competitiveness will definitely worsen as the high cost of the products will make locally produced items less competitive, when compared with imported alternatives,” he said.

    Ajayi-Kadir advised the Federal Government and Nigerian Electricity Regulatory Commission (NERC) to instead,  ensure improved electricity generation, transmission and distribution to meet the revenue needs of the electricity supply industry stakeholders.

    He stressed that government should ensure that at least , 90 per cent of electricity consumers were metered to ensure consumption reflective electricity bill payment.

    He also tasked government to formulate electricity policies that would aid investments in energy industry to increase generation capacities and usher in large scale production of electricity.

    “There is an urgent need for  diversification of energy sources and intensifying infrastructure investment in the power sector.

    “As it is today, the manufacturing sector, which is the engine of growth, is still struggling as a result of inclement production environment in Nigeria.

    “The expectation is that government will engage in extensive and intensive consultations with the manufacturers; focus on measures that will salvage the sector and halt the trend of shutdown of factories, knowing the implications and the multiplier effects on employment and the economy.

    “Care should be taken to avoid introducing burdensome measures that will further strangulate the manufacturing sector and the whole economy,” he said.

  • NERC orders DISCOs to stop billing disconnected customers

    NERC orders DISCOs to stop billing disconnected customers

    The Nigerian Electricity Regulatory Commission (NERC) has put a stop to a sharp practice by electricity distribution companies (DISCOs) in the country.

    Hitherto, DISCOs in the country have engaged in the practice of billing customers disconnected from electricity supply due to non-payment.

    The practice has resulted in protests and litigations among customers and the electricity distributors.

    However, NERC has ordered the DISCOs to stop billing any customer already disconnected for non-payment.

    The Commission, in an order signed by its chairman, Engr. Sanusi Garba insisted the extortion must stop.

    Garba, in the document titled: “Customer Protection Regulation 2023,” stated that DISCOs shall not bill customers until they are reconnected.

    “Whenever a supply address has been disconnected for non-payment and a bill has been produced representing consumption at the time of disconnection, the Distribution Company shall not bill for any additional charges in respect of that supply address until after it has reconnected electricity supply to the address,” he stated.

    NERC, however, disclosed that DISCOs may under special circumstances bill a customer a supplementary bill during the billing period.

    The document revealed that the special circumstances referred to could be when there is any need to amend an earlier bill where a customer made a request for correction.

  • NERC gives reasons for increasing rate of electricity tariffs

    NERC gives reasons for increasing rate of electricity tariffs

    The Nigeria Electricity Regulatory Commission (NERC) has disclosed the reasons behind the increasing rate of electricity tariffs across the country.

    TheNewsGuru.com (TNG) reports Aisha Mahmud, NERC Commissioner in charge of Consumers Affairs made the disclosure at the Customers’ Complaints Resolution Meeting Organised on Tuesday in Jos.

    Recall NERC had remained silent after it was first confirmed by TNG that electricity distribution companies in the country quietly hiked electricity tariffs across their franchise areas.

    The tariff hike was first observed on the Tariff Band A Non-MD, which increased from N57.55 per unit it was in December 2022 to N68.2 per unit in January 2023. It has remained so, checks confirm.

    However, according to Mahmud, the increasing rate of electricity tariffs was due to inflation, rising exchange rate, cost of gas, labour generation and other economic realities in the country.

    ”Inflation has gone up to double digit. The exchange rate, even the official rate, is crazy. Operators purchase most of their equipment abroad using the current exchange rate.

    “The cost of labour keeps increasing, among other factors,” the NERC Commissioner in charge of Consumers Affairs explained.

    On the meeting with customers, Mahmud said the commission was in Jos to educate customers on their rights and listen to their complaints with a view to addressing them on the spot.

    Speaking further at the meeting, she disclosed NERC will soon provide four million prepaid meters to electricity consumers in the country.

    Mahmud, who described the shortage of meters in the country as one of the biggest problems currently facing the commission, hinted that the challenge would soon be a thing of the past.

    She said that modalities had been put in place to provide the meters through the National Mass Metering Programme (NMP) of the Federal Government.

    ”Actually, metering is one of the biggest challenges that we have been facing in the last couple of years in the commission.

    ”I don’t think this is funny given that so much investments have been made in the power sector.

    ”It is said that in Nigeria, electricity generation started in Lagos as far back as 1826 with 20 megawatts. 126 years down the line, we are still talking about basic things as metering, a phase we should have passed a long time ago.

    ”Aside many interventions in that regard, including the zero phase of the NMP where over one million meters were provided, the first phase of the initiative will make available four million meters to customers,” she said.

    Mahmud, who said that all preparations had been concluded for the mass metering programme, explained that funding for the project would come through the Central Bank of Nigeria (CBN)

    ”We shall make available these meters to customers through the distribution companies and this is to show that the regulator is not just sitting but making efforts to see that all Nigerians have access to metres.

    ”So, we shall do all it takes as regulators to ensure that the issue of metering becomes a thing of the past. I strongly believe that with the plans ahead, we will overcome this challenge soon,” she said.

    Also speaking, Mr Abdu Mohammed, the Managing Director of Jos Electricity Distribution Plc (JED), said that the concerns raised by the customers at the meeting would be addressed immediately.

    ”Quite a lot of issues, ranging from metering, billing, power quality, complaints about our staff, among others, were raised.

    ”I want to promise that all these issues will be addressed immediately and, in terms of metering, we are very much on track.

    ”Few days back, we purchase 12,000 meters and they are currently in our store. We are expecting 305,000 meters in the forthcoming NMP phase one and the over 100,000 from the World Bank Intervention

    ”So, very soon, you will see traction in all pur franchise states and all our customers will be metered,” Mohammed said.

  • “2023 election proof Nigeria is an autocratic state, not democratic” -Ex-NERC boss

    “2023 election proof Nigeria is an autocratic state, not democratic” -Ex-NERC boss

    A former chairman and Chief Executive Officer, Nigerian Electricity Regulatory Commission, NERC, and current director of the Abuja School of Social and Political Thoughts, Dr. Sam Amadi, said the just concluded general elections, are proof that the country is no longer a democratic state, but rather an autocratic one.

    Amadi said this at the 2nd Ariyo Dare-Atoye Memorial Election Management and Governance Dialogue series, themed: “Is Nigeria a democracy? Reflection on the 2023 general election”, held in Abuja.

    In a statement made available to our correspondent, Amadi on Sunday stated that the outcome of the 2023 general elections was not entirely a reflection of the people’s choice, and also averred that the conduct of the elections would further hew down public trust and participation of Nigerians in subsequent elections.

    Describing the election as a ‘total desecration’, Amadi, however, wondered why politicians could not allow for a seamless, peaceful, and keenly contested electoral process, but resorted to violence.

    Particularly referring to the Independent National Electoral Commission, INEC, refusal to transmit results on the IREV, among other anomalies that greeted the 2023 general election, Amadi said that they were lucid indicators that the elections were overtly flawed, adding that the fundamental principles of democracy were omitted during the elections.

    “Nigeria is not yet a democracy because the fundamental features of democracy, the three of them coming to these elections, fair institutions that should provide equality for everybody, and guarantee basic freedoms have been denied largely in this election,” he said.

    Nigeria is not yet a democracy because the fundamental features of democracy, the three of them coming to these elections, fair institutions that should provide equality for everybody, and guarantee basic freedoms have been denied largely in this election

    “We’ve seen the innovation; the most recent innovation which is the electronic transmission of results was truncated by INEC in a very reckless and lamentable manner. We’ve also seen that in many countries and in many parts of the states, even with different parties, PDP APC, or whatever they are, we’ve seen governance incumbents use security to distort elections, drive away voters and rewrite results.

    “We’ve also seen the high point of it for us is what happened in Lagos where Nigeria citizens of a particular ethnic group were disenfranchised on a large scale; structurally, institutionally, with leaders saying that the reason for that is that they are going to interfere with the electoral act. Now, interference is when they make their preference.

    To give an example, look at Nasarawa. Women came out naked. What will make a woman, these are not porn stars, we are talking about mothers of any help of 70, or 80 years, coming stalr naked, and crying to God, that their mandates have been stolen

    “So, we are saying that if you look at the rating from rating agencies, the rate of democracy by the University of Guttenberg says Nigeria is an electoral autocracy. It means that we have to focus not much on INEC but we should be focused on how we ensure that the state institutions are neutral because as long as they’re not neutral, politicized, as long as they are within the control of politicians and incumbent, you can’t have fair and free elections.

    “So, the fact that Nigeria holds elections every year, doesn’t mean we’re a democracy. Russia holds this kind of election where the outcomes are predictable. How can you form a government based on clear suppression?

    “To give an example, look at Nasarawa. Women came out naked. What will make a woman, these are not porn stars, we are talking about mothers of any help of 70, or 80 years, coming stalr naked, and crying to God, that their mandates have been stolen.

    “Why do we have to have those kinds of sins? This suggests even something more autocratic than the colonial rule when colonial masters forcefully hijacked your land and hijacked your state and brutalized you. What the Abuja school is saying is that we are drifting now to real autocracy. We are no longer a democracy. We are not saying that alone, international rating agencies are saying that Nigeria first is a hybrid democracy; meaning that we are functional or formally democratic but the logic of why democrats is authoritarian”.

    Also speaking at the event, a legal practitioner, Victor Opatola, pointed out that Nigeria is divided among several lines, adding that the country must thrive if only the rule of law prevails.

    He established that thorough consideration of the balance of power, and party system, among other factors, are basic ingredients for a working democracy.

    He stated that power dominance by certain individuals is a major bane affecting the growth of the country.

  • NERC silent as electricity distribution companies hike tariffs

    NERC silent as electricity distribution companies hike tariffs

    The Nigerian Electricity Regulatory Commission (NERC) has remained silent after it was confirmed that electricity distribution companies in the country have quietly hiked tariffs across their franchise areas.

    TheNewsGuru.com (TNG) confirms the increase in electricity tariffs on Wednesday but calls put through to NERC’s Commissioner-in-charge of Consumers Affairs, Aisha Mahmud were not answered.

    NERC spokesman, Usman Arabi also neither picked up his calls nor responded to inquiries on the increase.

    The tariff hike was first observed on the Tariff Band A Non-MD, which increased from N57.55 per unit it was in December 2022 to N68.2 per unit in January 2023.

    Though the NERC had not released an official statement on the matter, the Abuja Electricity Distribution Company (AEDC) confirmed the tariff increase in a tweet the electricity distribution company has deleted.

    But on its website, the electricity regulatory authority explained that one of its primary functions as contained in Section 32 (d) of the Electric Power Sector Reform Act, 2005 was to ensure that the prices charged by licencees were fair to customers and sufficient to allow the licencees to finance their activities and obtain reasonable profit for efficient operations.

    “In pursuant to the authority given under Section 76 of the EPSR Act 2005, the commission established a methodology for determining electricity tariff in the Nigerian Electricity Supply Industry and subsequently issued a tariff order called the Multi-Year Tariff Order that sets out tariffs for the generation, transmission and distribution of electricity in Nigeria.

    “The purpose of the MYTO is to set cost-reflective tariffs which will allow the power sector to be properly funded and functional. It provides a 15-year tariff path for the NESI with limited minor reviews each year in the light of changes in a limited number of parameters (such as inflation, interest rates, exchange rates and generation capacity) and major reviews every five years, when all of the inputs are reviewed with the stakeholders,” NERC stated on its website.

    TNG reports the tariff increase that was first observed on the Tariff Band A Non-MD, which was increased from N57.55 per unit in December to N68.2 per unit, amounts to about a 19 per cent increase in tariffs.

    However, neither NERC nor the various electricity distribution companies, 10 in total, have made the current rates available for electricity consumers.

    Meanwhile, the Enugu Electricity Distribution Company (EEDC) in December confirmed a recent minor electricity tariff adjustment of about 13 per cent, which the company said was in reflection of economic realities meant to keep the electricity industry alive.

    EEDC had in December increased the tariff rate for Non-MD customers under R2SB class from N58.47 to N66.47 per kilowatt, which cuts across all categories of customers within the company’s network franchise area in the South-East.

    The Head, Corporate Communications of EEDC, Mr Emeka Ezeh had disclosed that the minor adjustment, which took effect from Dec. 1, 2022, was approved by the Nigerian Electricity Regulatory Commission (NERC) some months ago across all electricity distribution companies in the country.

    According to him, there is a minor adjustment by some percentage across board in the whole electricity distribution companies nationwide currently and it is not peculiar to EEDC alone.

    He said: “The minor increase in the rate of tariff approved by NERC is for Electricity Distribution Companies (DisCOs) to meet up with the current economic realities in the power/electricity sector.

    “Currently, the sector is seriously affected by the high inflationary rate in the country; as it affects our daily operational maintenance and services to our esteemed customers in our network.

    “The issue of high foreign exchange rate is affecting our business too in terms of importing most of our spare parts needed for daily maintenance and repairs in the network.

    “The high foreign exchange rate also impact on EEDC ever increasing investment on installations to further expand and fortify the network, leading to the improved services customers are experiencing within the South-East.”

    The EEDC spokesman appealed for the understanding of its esteemed customers, adding that if the indices mentioned and other factors “turn positive tomorrow; we belief that NERC will review the tariff downwards”.

    “The recent development is for us to remain in business, service our customers better and maintain obligations to other stakeholders within the sector/industry,” he added.

    However, customers within EEDC network in Enugu have continued to complain that the increase is already tightening the existing economic hardship.

    They were of the view that before now, the high inflationary rate of about 22 per cent, according to the National Bureau of Statistics (NBS), was even affecting how their families feed daily.

    Mr Obinna Nwafor, a resident of Achara layout in Enugu, noted that it was terrible that the residents cannot get any economic respite; “as there are so many struggles to survive in the country”.

    Nwafor said: “I wish this increase has not come now; so that at least we can have a sector that is relatively stable and not being affected by the nationwide inflationary trend”.

    Mr Jude Onyia, a resident of Uwani axis of Enugu metropolis, urged EEDC to consider those in the lower categories of their tariff line and exclude them from the increase.

    “It is clear that those of us in the low category of the tariff cannot easily meet up and other alternatives to electricity are quite costly too,” Onyia said.

  • BREAKING: NERC quietly approves increase in cost of electricity

    BREAKING: NERC quietly approves increase in cost of electricity

    The Nigerian Electricity Regulatory Commission (NERC) has quietly ordered electricity distribution companies to increase the cost of electricity across their franchise areas.

    TheNewsGuru.com (TNG) reports the Abuja Electricity Distribution Company (AEDC) confirmed the development on Wednesday.

    The tariff increase was first observed on the Tariff Band A Non MD, which was increased from N57.55 per unit in December to N68.2 per unit.

    When contacted, AEDC stated: “Good day, please be informed that the increase in Tariff is in compliance with NERC order”.

    BREAKING: NERC quietly orders increase in cost of electricity

     

    Meanwhile, neither the NERC nor the electricity distribution companies have released an official statement on the matter.

  • Power supply to drop again – TCN alerts Nigerians

    Power supply to drop again – TCN alerts Nigerians

    The Transmission Company of Nigeria (TCN) has announced that power supply will drop by 50 megawatts.

    TheNewsGuru.com (TNG) reports TCN made this known in a statement on Monday.

    TCN explained that the expected drop is a result of planned annual “preventive maintenance” on the line bay at Lekki Transmission Substation in Lagos.

    During the maintenance period, about 50MW will be interrupted, affecting the power supply to Lekki phase 1, Oniru, Elegushi, Waterfront, Igbo Efon and Twenty-first Century Estate in Lagos state.

    “TCN regrets all inconvenience this might cause electricity consumers in the affected area,” the statement said.

    Meanwhile, the Nigerian Electricity Regulatory Commission (NERC) had responded to a widespread public clamour following the consistent system collapsing of the power grid, over four incidents recorded so far this year.

    According to the commission, all hands are on deck to ensure boost in power generation and supply to electricity consumers, adding that all stakeholders, including gas firms had signed binding contracts to the effect.

    “Although there have been contracts in the past, they were not binding and the parties could decide not to honour them. But with the new agreement, we would make sure no party defaults once the contracts are signed.

    “Whoever defaults will be held responsible and will be sanctioned”, NERC Chairman, Garba Sanusi had said during a media parley in Lagos.

  • Nigerians to enjoy improved power supply from July 1 – NERC

    Nigerians to enjoy improved power supply from July 1 – NERC

    Mr Sanusi Garba, Chairman, Nigerian Electricity Regulatory Commission (NERC), says Nigerians will witness improved power supply from July 1 following renewed efforts by industry stakeholders.

    Garba gave the assurance at an interactive session with newsmen after the Second Nigerian Electricity Supply Industry (NESI) meeting on Wednesday in Lagos.

    TheNewsGuru.com recalls that the national grid has collapsed five times this year and was on Sunday only able to supply 9MW of electricity.

    The meeting was attended by top officials of NERC, Transmission Company of Nigeria (TCN), Generation Companies as well electricity Distribution Companies.

    He said NERC had facilitated a contractual agreement between the Gencos, TCN and the 11 DisCos that would guarantee the generation, transmission and distribution of an average of 5,000MW of electricity daily to customers effective July 1.

    According to him, the contract is binding on all the players across the sector’s value chain and stipulates penalties for any party that defaults on the arrangement under the new regime.

    Garba said: “Yes, we have had discussions with the gas suppliers within our regulatory space. We have them on board to ensure that once we made the commercial requirements, gas was going to flow.

    “Now, for transmission we have heard of figures well in excess of 5,000MW and clearly TCN will be able to deliver that.

    “I recall clearly in March last year we had 5,400MW. So, it means it is quite possible based on signed commitments.”

    He said all the stakeholders across the value chain had obligations and there would be consequences if they failed to deliver.

    “So, in a situation where Gencos are able to deliver 5,000MW but TCN is unable to do so, they’ll pay the penalty to the generation company and so on.

    “And whenever the power is available and DisCos do not take the power;

    then they will pay liquidated damages that will compensate other market participants.

    “We might not have 24/7 power supply from July 1 but Nigerians will see the trajectory because the target is to have an average of 5,000MW daily for transmission and distribution,” said Garba.

    He also blamed the recent collapse of the national grid on inadequate gas supply, maintenance of some thermal stations as well as vandalism of power infrastructure and gas pipelines.

    “The challenges of today are very clear. In the past, it used to be weak infrastructure and so on and so forth. Now we have certain external factors contributing to these events.

    “Obviously, it’s not common around the world to see people coming down, pulling down transmission towers for no reason; or blowing up crude oil lines.

    “In a number of instances, most of the gas we have today is associated gas and because of that when crude lines are disrupted it also affects the supply of gas to the thermal stations,” he said.

    Garba commended the Federal Government and the Central Bank of Nigeria (CBN) for the interventions in the power sector, adding that country would soon start feeling the impact of the investments positively.