NERC’s new Electricity Tariffs to be paid before and from April

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The Nigerian Electricity Regulatory Commission (NERC) has published a reviewed electricity tariff for December 2019 for 11 Distribution Companies (DisCos) but freeze hike until April 2020. This is as contained in the ‘December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020,’ dated December 31, 2019.

The Commission stated that it has taken into consideration the  actual changes in the relevant macroeconomic variables and available generation capacity as at 31s October 2019 in updating the operating (MYTO) 2015 Order for 2019 in line with the MYTO methodology. The macroeconomic variables include average monthly inflation rate of 11.3%, NGN/USD exchange rate computed as 306.90+1% premium = 309.97, US rate of Inflation of 1.8%, Gas price of USD2.50MMBTU and gas transportation cost of USD0.8MMBTU.

The tariffs as contained in the reviewed ‘December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 is as follows

For Abuja DisCo, End-user cost reflective tariff with effect from 1st January is N54.3 per kilowatt hour (KWH) on the average, However, End-user allowed tariff is currently N32.7 per kilowatt hour (KWH) according to NERC. Hence, Residential 2 (R2) customers’ bill remains at N24.30/kwh till April when the PRSP stipulates a hike. But it must remit 42% as payment for monthly bulk energy to the Nigerian Bulk Electricity Trading Plc (NBET).

Benin DisCo End-user cost reflective tariff is N56.4 per kilowatt hour (KWH) while End-user allowed tariff is currently an average of N32.5/kwh. Residential customers continues to pay N31.26/kwh and and the company must remit 35.7% for bulk energy henceforth.

For Ikeja DisCo customers ought to pay N44.6/kwh as End-user cost reflective tariff but are allowed to pay N27.3/kwh for now by NERC. While its Residential customers continue to pay N21.30/kwh, the DisCo remits 49% bulk energy payment.

Customers of Eko DisCo pays End-user allowed tariff of N28.3/kwh average instead of N47.0/kwh End-user cost reflective amount. Residential customers will continue to pay N24/kwh while the company must remit 43% bulk energy settlement to NBET.

Kano DisCo, customers are to pay N52.7/kwh average as End-user cost reflective tariff but are currently allowed to pay N30.1/kwh. The DisCos collects N22.50/kwh from Residential customers now while it is to pay 38% of its monthly bulk energy bill.

Enugu DisCo averagely collects N35.3/kwh from customers End-user allowed tariff instead of N54.4/kwh as End-user cost reflective tariff. Residential customers pay N30.93/kwh and the DisCo must pay 42% monthly bulk energy invoice to NBET.

For Yola DisCo, customers will pay N57.4/kwh as End-user cost reflective tariff but are currently allowed to pay N26.8/kwh. The company collects N23.25/kwh from customers while it must pay 12% of its monthly energy invoice to NBET.

The Federal Government’s updated Power Sector Recovery Programme (PSPRP) does not envisage an immediate increase in end-users tariffs until 1st April 2020 and a transition to full cost reflectivity by end of 2021

The order stated that; “All FGN intervention from the financing plan of the PSRP for funding tariff shortfall shall be applied through NBET and the market operator to ensure 100 per cent settlement of invoices issued by market participants,”

It further stated that; “Effectively, this order places a freeze on the tariffs of TCN and administrative charges until April 2020 at the rates applied in generating MO invoices for the period of January to October 2019.”

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