Electricity distribution companies in Nigeria have called on the federal government to intervene in the power sector in order to avert an increase of over 200% in electricity tariff.
According to the operators, the intervention which is needed to address over 800 billion Naira revenue shortfall can come like subsidies to consumers or provision of special access to foreign exchange for the operating companies.
The average energy rate across the country is 22 Naira 8 kobo per kilowatt, but distributors say this may increase to between 70 Naira and 105 Naira per kilowatt if the revenue shortfall persists.
The Chief Executive Officer of the Association of Nigerian Electricity Distributors, Azu Obiaya, reportedly said the debts owed to power distribution companies by private electricity consumers, businesses and government authorities have climbed to about N568 billion.
He added that those debts are affecting the operations of the distribution companies and many are no longer able meet targets and service consumers.
Reports say a proposal for the increment of electricity tariff has been sent to the Nigerian Electricity Regulatory Commission.
An electricity tariff approved by the NERC took effect in February, 2016.
The commission also removed fixed electricity charges ordering that Discos should only bill consumers for what they consume.
NERC said “although, the new tariff regimes comes with an increase in energy charges, all electricity consumers (residential as well as commercial) will no longer pay fixed charges, so their total bills will depend on the electricity they actually consume and may be reduced when they conserve electricity.”
Electricity consumers in Nigeria may have to gear up to pay higher tariffs to enjoy constant power supply.
This was made known by the Minister for Power, Works and Housing, Babatunde Fashola after a guided tour of the Egbin power plant in Lagos.
The guided tour of the Egbin power plant evolved into a meeting with the management of the power plant, where the chairman of the plant said that an additional 200 megawatts of electricity has been dedicated to Lagos with a current generation of 1100 megawatts to the national grid.
He also spoke about the challenges being faced by the management.
The Minister showed in his speech that he was not oblivious of the issues facing the plant but said that there is a national plan to tackle the problem and ensure all homes enjoy power supply 24 hours but this might cost more.
Mr Fashola said that the additional 220 megawatts of electricity produced by the Egbin power plant, should be distributed to consumers, both in industrial and residential areas.
The Minister added that the federal government would only pay legally verifiable debts owed the power generating companies.
The Nigerian Electricity Regulatory Commission (NERC) is set to begin a process that will cap the revenues that electricity distribution companies can generate from their consumers through the estimated billing method.
At a public hearing on Capping Estimated Billings in the Power Sector, the Assistant General Manager in charge of Customer Service Standard at the commission, Mr Shittu Lawal, observed that the consumers are baring most of the burden of the inadequate metering across the country.
Mr Lawal said 44.06% of registered electricity consumers in the country do not have effective metering system.
He also noted that the proposed capping system would encourage the distribution companies to ensure adequate metering of electricity consumers.
The Nigerian Electricity Regulatory Commission (NERC) has extended the planned increase in tariffs for residential consumers to June this year while charges for other classes of consumers have taken effect from January first.
Addressing a news conference in Abuja, the chairman of the NERC, Dr Sam Amadi, said that the freeze in charges for residential consumers, who constitute about 80 per cent of the electricity consumers, was aimed at promoting the interest of consumers as well as stimulate operators to serve consumers better.
Dr Amadi expressed worries over the rate of meter deployment by electricity distribution companies in-spite of the credited advancement payment initiatives.
Since private companies took over ownership of some unbundled government stake in the power sector, new owners have said they needed to increase tariff in order to meet the needed increase in generating capacity of the plants.