Confusion over alleged increase in electricity tariffs

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* NERC denies suspending qualifying client program

Emmanuel Addeh

The Nigerian power sector was confused yesterday over conflicting information regarding a resolution from the Nigerian Electricity Regulatory Commission (NERC), ordering the 11 electricity distribution companies (Discos) to increase their prices from Wednesday, September 1, 2021.

In a document bearing the number 023 / EKEDP / GMCLR / 0025/2021, dated August 25, 2021 and signed by the Managing Director, Loss Reduction, Eko Electricity Distribution Company (EKEDC), Olumide Anthony-Jerome, the Disco had informed its customers on the decision to increase tariffs.

The company stressed that the increase would be passed on to the energy bill for October 2021, which would represent the energy consumption for September 2021.

“For customers with a meter with in-house sales provisions, we urge you to adjust the rates accordingly to reflect the new rate increase released by NERC,” the memo reads.
Entitled: “Notice of Rate Increase,” the document states that the increase follows approval from NERC, the industry regulator.

“This is to officially inform you that there will be an increase in the electricity tariff as of September 1, 2021. This increase results from the national mandate to implement the service-based tariff approved by our regulators (NERC ).

“Please note that the increase will be passed on to the energy bill for October 2021 which will represent the energy consumption for September 2021,” he said.
However, hours later, EKEDC, in a statement signed by its managing director, Mr. Adeoye Fadeyibi, called the publication unfounded and urged the public to ignore all such reports.

“As we continue to examine effective and regulatory strategies to manage the impact of changes in macroeconomic indices affecting end-user tariffs, the general public will be duly informed, should the end-user tariff change occur,” the said the statement.
In May, the federal government, through Energy Minister Sale Mamman, admitted that although there would be an increase on July 1, it would not be “significant”.

Mamman said that instead of a sharp increase in electricity tariffs, Nigerians should expect an increase in efficiency in the sector to reduce tariffs while dealing with headwinds due to currencies and inflation.
He explained that the order issued by NERC on April 26, 2021 titled “Notice of Minor and Extraordinary Tariff Review of Electric Transmission and Distribution Companies” was a routine procedure.

Meanwhile, NERC said the Eligible Customer Regulation (ECR), which allows a certain class of electricity consumers to bypass nightclubs and deal directly with production companies (Gencos) and the powerhouse company. Nigeria’s transmission (TCN) has not been suspended.

NERC said it only prevents the TCN from recognizing unauthorized qualifying customer transactions in the market settlement report without the commission’s prior approval.
He noted that the directive was that all such unauthorized transactions should revert to billing by nightclubs operating in franchise areas where customers are located, but without disruption of supply until the customer has been granted eligibility status.

She said the regulations were intended to provide a straightforward process to achieve commission eligibility status for a customer whose consumption exceeds the minimum threshold of 2 MWh / hr over a one-month period.
The statement by NERC Public Affairs Department Director General Usman Arabi noted that a candidate eligible customer is required to show that they are not in debt to the existing vendor before they can be granted eligibility. to change electricity supplier.

In addition, he said that the potential qualifying customer’s supplier or commercial concessionaire should have unencumbered production capacity to sell to another customer as well as proof of an agreement with the supplier of last resort.


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