The recent increase in electricity tariff by power distribution companies, approved by the Nigerian Electricity Regulatory Commission, shows that the Federal Government and Discos are taking Nigerians for granted, electricity sector experts and consumer groups.
Speaking on the issue on Sunday, they demanded the Federal Government to order power distribution companies to reverse the rate increase, emphasizing that it came amid the severe economic crisis in Nigeria at present.
They also pointed out that the energy distributors increased the electricity rate charged to consumers without following the due process contained in the Multiannual Rate Order.
Since Disco confirmed the rate hike last week, several convictions had followed the development, despite the industry regulator’s silence on the issue.
the punch reported Wednesday that electricity distribution companies had quietly raised the rate paid by power consumers across the country.
The report stated that although most nightclubs did not make this public, electricity users opposed the move, describing it as “a perfect robbery” amid the harsh economic realities in Nigeria today.
The Abuja Electricity Distribution Company, which confirmed the rate increase while responding to a Twitter user on Wednesday, explained that it was based on the order of the Nigerian Electricity Regulatory Commission.
“Good day, please note that the rate increase is in compliance with the NERC order,” Disco stated.
Reacting to the development on Sunday, the chairman of the Nigerian Electricity Consumer Advocacy Network, Tomi Akingbogun, said the rate increase should be reversed considering the economic difficulties across the country.
He said: “It is right that we call for a reversal and we are demanding that it be reversed. However, it is not the first time they have done it. It has been a regular occurrence for several years and in those cases we have requested reversals.
“But the next thing you’ll hear is they changed the law or changed the Multi-Year Fee Order to accommodate what they’re doing. When we keep yelling, they just ignore us, but I think the government needs to really take the public seriously.
“And the public will also have to defend their rights, because there will come a point where they will pressure everyone to the point that we will all rise up in the streets. We have been trying to make sure that the masses are not squeezed to the point of no return.”
Akingbogun said that NECAN held many meetings with power sector operators on why it was not in the interest of the masses to raise tariffs, but the position of consumers was ignored.
“It’s really frustrating. How can someone with a minimum salary of N30,000 survive this rate increase in the type of economy prevailing in Nigeria now? You have to reverse the increase for the benefit of the masses,” she stated.
For his part, a legal consultant and adviser on energy law, Prof. Yemi Oke, explained that energy tariff increases had to follow some established procedures, but emphasized that this was neglected in the implementation of the recent increase.
He said: “Every electricity rate increase must follow a Multi-Year Rate Order. The year 2020 was the last order in which a semi-annual review was speculated to determine a rate increase.
“The MYTO should be reviewed and specifically authorize the rate increase after following the established rules, including extensive consultation. All this has not been done.
“Even at my keynote address, I caught this same anomaly in past rate increases. This new one shows that they are determined to continue taking Nigerians for granted.”
In addition, the Chairman of the Nigerian Consumer Protection Network, Kunle Olubiyo, said that the Federal Government has finally withdrawn the subsidy on electricity rates.
He said the NERC had given power distributors an open check to make minor rate revisions under the reflective rate and service-based rate schemes.
“It is authoritative that I tell you that the Federal Government finally withdrew all kinds of subsidies in the electricity rate for the category of Band A consumers,” he said.
He added: “The Federal Government in selecting the category of Band A electricity consumers considered that those of us in Band A should be able to pay any amount placed on the electricity rate. This is confirmed and instructive. It is useless for any institution to deny this reality.
“Under the Reflexive Tariff and the Service-Based Tariff, as a condition prior to the electric rate increase, NERC has apparently given the 11 electric distribution companies an open check to periodically make minor rate adjustments.
“This is not caring about the place of engagement and regular consultation, which in the past had turned out to be a smoke screen and only to fulfill all fairness.”
Olubiyo stated that power consumers in Band A would have to pay more for electricity, since the increase in the Band A tariff took effect from January 2023.
He said: “The biggest challenge facing regulatory institutions, represented by NERC, is that the commission, more than ever before, must rise up and wake up to its responsibility to effectively monitor electricity distribution/market licensees, and demonstrate even more the ability to be an incorruptible judge and an impartial and intrepid arbitrator”.
Meanwhile, the 11 electricity distribution companies earned around N597bn in electricity sales in the space of 12 months, according to data obtained from the Nigerian Electricity Regulatory Commission.
NERC data showed that Disco’s energy sales revenue was made between January and December 2022.
A breakdown of the report, ‘Discos’ Energy Sales by Service Band Data from November 2020 to September 2022′, showed that N597bn were collected out of a total of N840bn billed by utilities.
The 11 Discos billed a total of 16 billion kWh of electricity during the year under review.
Although Abuja Disco billed N109 billion for electricity, however, it was able to collect around N91 billion.
While Benin Disco billed N89bn, the utility was able to collect N51bn.
Eko Disco billed its clients N97bn, however, the company was able to reach the collection of N89bn.
Also, Enugu Discos produced a bill of N75bn, but was able to collect N52bn in the year.
For its part, Ibadan Discos, one of the public service companies liquidated during the year under review, billed N101bn, but was able to collect around N67bn.
Ikeja Disco billed the highest with N130bn and recorded the highest take of N120bn.
Jos Electricity Distribution Company sent invoices worth N45 billion but was able to recover around N20 billion.
Kaduna Discos Billed 58 Billion, Raised N21 Billion; Kano invoiced N53bn and received N34bn; Port Harcourt Disco, N64bn but recovered N41bn; while Yola Discos, still run by the government, sent a bill of N18 billion, but was able to raise N10 billion, making it the lowest-revenue utility.
For his part, the national president of the Nigerian Electricity Consumers Association, Chijioke James, insisted that the interest of consumers must be considered as the government takes the second step in the privatization process.