The House of Representatives Committee on Power has asked the Nigerian Electricity Regulatory Commission to suspend the planned increase in electricity tariff.
The committee Chairman, Aliyu Magaji, gave the directive during a meeting with the Minister of Power and the NERC on the rationale behind the increase when the house had already passed a bill which criminalises estimated billing.
NERC had earlier announced that the increase would take effect from the 1st of April.
Meanwhile, the House committee also condemned President Muhammadu Buhari’s directive to transfer the Nigerian Bulk Electricity Trading Company Limited from the Ministry of Power to the Ministry of Finance.
A series of documents dated December 31, 2019 indicate an increase that ranges from 59.7 per cent to 77.6 per cent.
The increase affects all categories of electricity consumers, except those classified as residential (R1) whose N4 per kWh charge was left unchanged.
According to the documents jointly signed by Professor Momoh and the Commissioner for Legal, License, and Compliance, Dafe Akpeneye, the NERC said the reviewed tariffs were effective January 1, 2020.
The development affects the 11 Distribution Companies (DISCOs) in the country such as Abuja DISCO, Benin DISCO, Enugu DISCO, and Eko DISCO.
Others are Ibadan DISCO, Ikeja DISCO, Jos DISCO, Kaduna DISCO, Kano DISCO, Port Harcourt DISCO, and Yola DISCO.
This sparked widespread criticism of the government, apparently forcing the NERC to make further clarification on the controversy.
At Monday’s press conference, Professor Momoh explained that the review of the Multi-Year Tariff Order (MYTO) does not mean an immediate increase in tariff for electricity consumers.
He added that the commission would engage the public on the planned review in the next three months, before deciding on any implementation.
The NERC boss also said the electricity body would begin the regulation of estimated billing by electricity distribution companies who fail to provide meters for their customers.
In a bid to further explain the rationale behind its decision, the regulatory body issued a statement.
Read the statement below:
TARIFF REVIEW CLARIFICATION.
We make this statement to inform all our esteemed customers that we are not unmindful of news making the rounds that Electricity tariffs have been increased effective January 1 2020 as reported in some print and electronic media.
For clarity and improved understanding, we state the following points:
The Nigerian Electricity Supply Industry (NESI) is primarily regulated by the Nigeria Electricity Regulatory Commission (NERC).
NERC is empowered by the EPSR Act (EPSRA) to make Orders and Declarations in a manner promoting efficiency and sustainability within the NESI.
NERC is empowered by EPSRA to carry out minor reviews of the Multi-Year Tariff Order (MYTO) 2015 (the Electricity Tariff), twice a year.
An accurate electricity tariff assists greatly in ensuring efficient power supply delivery from the different stages of the electricity process, from Generation through Transmission to Distribution, as it assures stakeholders and participants of their costs recovery and return on investment. This makes the business viable.
NERC has just reviewed the MYTO 2015 and has published an Order on Tariffs and Minimum Remittance for Jan-June 2020.
The tariffs anticipate changes in the currency exchange rates between the United States and Nigeria, changes in the rate of inflation and Gas prices.
The Tariffs shall remain the same as they presently are (i.e. 2015 levels) until April 01 2020 when there will be a slight increment to cater to tariff shortfalls which shall be gradually passed on to the consumer until this is fully completed by the end of 2021.
In view of the foregoing, we state emphatically that there shall be no change or increase in the existing Electricity tariff until April 01 2020 when the new adjusted tariffs shall begin to gradually reflect the dynamism of our macro-economy.
We sincerely hope that this statement substantially clarifies the accurate position and allays any fears and concerns, our esteemed customers may have.
The Federal Government, through the Nigerian Electricity Regulatory Commission (NERC), has approved the immediate review of electricity tariffs across the country.
NERC announced this in a series of documents obtained by Channels Television on Saturday.
The documents dated December 31, 2019, were jointly signed by the NERC Chairman, Joseph Momoh, as well as the Commissioner for Legal, License, and Compliance, Dafe Akpeneye.
A review of the new amount to be paid by various categories of electricity consumers indicates an increase that ranges from 59.7 per cent to 77.6 per cent.
Consumers classified as residential (R1) were, however, excluded from the review as the N4 per kWh they pay was left unchanged.
The development affected the 11 Distribution Companies (DISCOs) spread across the country such as Abuja DISCO, Benin DISCO, Enugu DISCO, and Eko DISCO.
Others are Ibadan DISCO, Ikeja DISCO, Jos DISCO, Kaduna DISCO, Kano DISCO, Port Harcourt DISCO, and Yola DISCO.
According to the latest order, the new amount to pay varies among categories of electricity consumers such as residential, commercial, industrial, special, and lighting.
A majority of Nigerians fall in the category of residential consumers who are those using singe phase and three-phase meters, as well as electricity consumption of about 50 kWh in premises with flats exclusively for residential purposes.
Those categorised under commercial are consumers who use premises for any purpose other than exclusively as residence or as a factory for manufacturing goods, while the industrial consumers are those who use their premises for manufacturing goods, including welding and ironmonger.
Similarly, those involved in agriculture other than agro-allied enterprises involved in processing, water boards, and religious houses, among others are categorised as special electricity consumers.
NERC explained that the new order was based on the actual changes in macroeconomic variables in generation capacity as at October 31, 2019.
It added that the order was based on the exchange rates of N306.9 plus one per cent premium which is about N309.97 to the dollar and gas price of $2.50 per million metric tons BTU and gas transportation cost of $0.80 per MMBTU.
See the breakdown of the reviewed amount to be paid by various categories of consumers in their respective states below:
The House of Representatives has held an investigative hearing into the suspension of the board of directors of Ibadan Electricity Distribution Company (IBEDC) allegedly by the Nigerian Electricity Regulatory Commission (NERC).
Chairman of the House Committee on Power, Mr Dan Asuquo, presided over the session which took place on Wednesday at the National Assembly complex in Abuja.
He said the meeting was convened to tackle critical issues, including the operations and administrations of major stakeholders in the power sector.
The lawmaker emphasised the relationship between the sector and national development towards the prosperity of the nation.
He said, “If we are to grow as a people and deliver on our promises as a great nation, we just must fix the power sector.
“There is no other path to national growth and this is why we (the National Assembly) are passionate in playing our role as troubleshooters in the Nigerian electricity supply industry and to continually put off the fires here and there that threaten its growth and even its existence as a whole.”
Asuquo noted that the legislature would continue to intervene wherever issues that have adverse implications on the health and growth of the sector arise.
He highlighted the case of the suspension of “all executive and non-executive directors of IBEDC as one of such instances.
The committee chairman stressed that the Independent Power Producers (IPP) needs to consolidate the positions in the new post-reform market, saying a complicated market calls for an all-inclusive engagement from stakeholders.
He observed that it was on this note that the order of the Nigerian Electricity Regulatory Commission (NERC) purportedly dissolving the board of the IBEDC came as a source of concern to the National Assembly and Nigerians at large.
The lawmaker added that this prompted the House of Representatives to direct its Committee on Power to wade into the crisis with the aim of ensuring that the free market was protected.
While welcoming the officials of NERC, IBEDC, and others present at the session, he criticised the situation where the Minister of Power, Mr Babatunde Fashola, and officials from the ministry were absent.
Speaker of the House, Mr Yakubu Dogara, also informed the gathering that the session was convened following a motion brought before that House in which there were allegations of an unlawful act against IBEDC by NERC.
Dogara, who was represented by the Chief Whip of the House, Alhassan Doguwa, noted that the electricity sector occupies a prime position in the nation’s economy and the well-being of its people.
He described the sector as the bedrock on which a sustainable economic development is built, saying it contributes immensely to the prosperity of a nation.
The Speaker recalled that the House had set up an ad-hoc committee in June to investigate an alleged breach of constitution by an electricity company in the Niger Delta region, while another was set up to curb excessive estimated electricity charges levied on consumers by electricity distribution companies.
He, however, said the decision of the NERC was not in line with the law and there were concerns that regulatory best practices might have been compromised or violated in the process.
Dogara also noted that such move was capable of scaring away genuine investors from the country, saying the essence of the investigation was to enable the lawmakers to arrive at the real fact of the matter.
But the hearing suffered a setback when the Chairman of NERC, Professor James Momoh, informed the matter that they were not at liberty to speak on the matter as it was already in court.
Professor Momoh said, “IBEDC had filed a suit in the Federal High Court, Abuja, and we were served this order on June 27, 2018. Based on the letter sent to IBEDC on June 19, 2018, parties have appeared in court and the case is still in court. We have been advised that this hearing will be considered to be against the court order.”
He noted that the court had fixed October 15 to hear the matter while all parties were asked to wait for the court to determine the next action.
The NERC Chairman, however, said they have submitted a detailed report which captures the position of the commission to the House Committee.
In his response, the Committee Chairman said the NERC was not only answerable to the Nigerian people but also to its parliament, stressing that the organisation came into existence by the act of parliament.
He then clarified that the session was not to interfere with the court process but to ensure that the laws made by the National Assembly were properly adhered to while the heads of various organisation act within the limit of the law.
Asuquo consequently directed that the session return into an executive session behind closed-door, saying the second part of the motion which brought about the hearing stated that they should investigate the stability of the market itself.
Nigeria’s largest indigenous entrepreneurial facility, popularly known as the Ariaria market in Abia state, may soon overcome decades of inadequate electricity that hampers the output of thousands of Nigerians working and trading at the multi-million dollar hub.
The Nigerian Electricity Regulatory Commission (NERC) on Wednesday announced that licenses have been issued for the generation and distribution of 9.5 megawatts of electricity to serve the Ariaria market in Aba.
The new licenses were issued to ”Ariaria Market Independent Power Plant Limited” and ”Ariaria Independent Energy Distribution Network Limited”
Ariaria market is West Africa’s largest hub of entrepreneurs who produced goods that are distributed across West and central African countries.
The Lagos State Governor, Mr. Akinwunmi Ambode is seeking approval from the Nigerian Electricity Regulatory Commission (NERC) for the Embedded Power Programme, by the state government.
The government in a meeting with some members of the State Executive Council lawmakers and stakeholders at the NERC’s head office in Abuja, stated that the Embedded Power Project was designed as his administration’s flagship programme for direct intervention in the power value chain, in achieving a 24 – hour steady power supply in Lagos.
He said the proposed power programme would generate up to 3,000MW of power through accelerated deployment of various power plants in strategic locations across the State by private sector power providers within three to six years.
In a press statement by the Chief Press Secretary to the givernor, Habib Aruna, he noted that Nigerians’ aspiration to create a secured and prosperous nation that is globally competitive will be difficult to achieve without stable power supply.
According to the governor, efforts are ongoing to resolve the power crisis, it had become increasingly clear that the problems in the energy sector could no longer be left to the Federal Government alone to solve.
“Embedded power was designed as our flagship programme for direct intervention in the power value chain towards achieving a 24-hour power for Lagos. Lagos State has always demonstrated its capacity and willingness to play a leading role in resolving the power sector challenges in the state, subject to the limit of the federal authority allowed regulations.
“Having succeeded in powering government facilities, the next level of intervention for our government is to collaborate with other stakeholders in the power sector to design and implement a roadmap for uninterrupted power supply to homes and businesses in Lagos State.
“The draft of the Lagos State Embedded Power Bill was finalised in May 2017 and submitted to the National Electricity Regulatory Commission for clearance before same can be forwarded to the State House of Assembly.
“The stakeholders meeting holding today is a continuation of the ongoing engagement between NERC and the Lagos State Government on the Lagos State Embedded Power Programme.
“We are convinced that the offer by our government to deploy the state’s balance sheet in support of power generation, transmission, distribution, gas supply, metering, collection and enforcement in Lagos State will significantly relieve the national grid and free more energy for distribution to other parts of Nigeria.
“The proposed power programme will generate up to 3,000MW of power through accelerated deployment of various power plants in strategic locations across the state by private sector power providers within three to six years.”
He said the State Government would issue guarantees in support of the Power Purchase Agreements that will be signed between the distribution companies and the private sector embedded power providers to enhance bankability of the projects.
He added that the power generated under the programme will be distributed through the networks of Eko and Ikeja Distribution Companies while the state would support the distribution companies in upgrading their distribution infrastructure for embedded power areas in line with NERC guidelines.
“The State Government will support the distribution companies in installation of smart prepaid meters in the areas where embedded power is deployed. We will institute a cost-reflective tariff regime that is fair to all stakeholders, sustainable and capable of attracting private capital to the sector on a continuous basis.
“Other areas of collaboration include support for revenue collection, legislation and establishment of an agency for enforcement of power theft laws in Lagos.
“Our prayer today is to seek the commission’s no objection letter for the Lagos State Embedded Power Programme, based on cost reflective tariff regime that is fair to all parties and capable of unlocking private sector investments into the power sector on a sustainable basis,” the Governor said.
Responding, the NERC’s Commissioner in charge of Legal License and Compliance, Dafe Akpeneye, who stood in for the Commission’s Vice Chairman, promised that the NERC would work with the Lagos State Government to ensure the success of the programme.
“Within the ambit of the law and existing regulations, you have our unflinching support in this project.
“So in response to what you said in your prayers to us, Your Excellency, I reaffirm the support of NERC towards this project. Our commitment is to create a viable electricity industry that works for Nigeria and Nigerians.
“As the laws and regulations permit us, we will work with you on this project to ensure that it does see the light of the day,” Akpaneye promised.
Akpeneye however called the Governor’s attention to some safety issues that concern the state.
He spoke about the right of way, standards and designs, electricity theft as well as customers’ enumeration.
He noted that a situation where the Commission’s record indicates that there are only 1.2million registered electricity customers in Lagos State is not tidy enough when almost all the houses in the state are connected to national grid.
Representatives of both Eko and Ikeja Distribution Companies at the meeting declared their support for the project, saying that it would be detrimental to the progress of Nigeria if they opposed it.
The Court of Appeal in Lagos has ordered the Chief Judge of the Federal High Court to re-assign a suit on electricity tariff to a new judge for adjudication.
The Appeal Court held that Justice Mohammed Idris, who heard the case, violated the appellant’s right to fair hearing and thereby committed “a grave error”.
An activist-lawyer Toluwani Adebiyi had sued the Nigerian Electricity Regulatory Commission (NERC) over the purported planned increase in electricity tariff.
Justice Idris had made an interim order that status quo be maintained in the suit. The order, in effect, barred NERC from increasing the tariff.
NERC, through its lawyer, Anthony Idigbe, however, filed a motion on notice seeking to discharge the interim order.
In his ruling, Justice Idris dismissed NERC’s application for being filed outside the seven days prescribed by the court’s rules.
The judge similarly dismissed NERC’s preliminary objection on the basis that it was also filed out of time. Dissatisfied, the Commission appealed to challenge Justice Idris’ ruling.
Delivering judgments in the appeals on Monday, Justice Abraham Georgewill held that Justice Idris misused his powers of discretion.
The appeal court held that Justice Idris “approbated and reprobated” when he heard NERC’s application to regularise its processes, and still set aside the appellant’s motion to discharge the interim order.
Justice Georgewill said Justice Idris relied on technicality in denying NERC of a fair hearing, thereby occasioning a miscarriage of justice.
“The trial court accorded undue reverence and relevance to technicality. The era of technical justice is gone in our courts, substantial justice is key,” the judge said.
Holding that NERC’s motion on notice seeking to discharge the ex-parte order was competent, Justice Georgewill held: “A breach of right to fair hearing renders the entire proceedings a nullity”.
He further held that Justice Idris “engaged in injudicious and capricious exercise of discretion, which is a flagrant breach of Section 36 of the 1999 Constitution”.
“This is a clear case of travesty of justice to hear the plaintiff’s case after striking out the motion on notice to discharge the order, the law should take its cause. The court below failed to observe the principle of fair hearing which is a rule of natural justice. The right to fair hearing is not a cosmetic right, it is a fundamental right. While justice need not be delayed, it need not be rushed; the appeal hereby succeeds.
“The case is consequently remitted to the lower court for another judge to determine the case as may be assigned by the Chief Judge. Going by the grave error of the court below, the motion on notice is remitted for same to be heard and determined expeditiously; the appeal has merit. The entire proceedings of the lower court are hereby set aside. There shall be no order as to court,” Justice Georgewill.
The Appeal Court also upheld appeals by NERC and the Distribution Companies (DISCOs) challenging the dismissal of its preliminary objection.
It, however, dismissed an appeal filed by Zikglass Networks Ltd, describing the company as a “meddlesome interloper”.
“That a person is a party to a suit does not mean he has the right to appeal a decision which has not affected him, that will be a mere academic exercise. This is a needless appeal which did not raise any question for determination. The appeal is completely an abuse of court process and is hereby dismissed,” the judge held.
Minister of Power, Works and Housing, Babatunde Fashola has mandated the National Electricity Regulatory Commission (NERC) to sanction any DISCO that fails to meet up with its metering commitment.
Speaking at the 16th monthly meeting of operators in the electricity industry, at the Ugwuaji 330/132 Kv Transmission Station, Enugu State, Mr Fashola said the Federal Government has zero tolerance for DISCOs who extort customers and sabotage the effort of the government in fighting corruption in all sectors.
“NERC as the regulator has been mandated to ensure that DISCOs implement the commitment they made to this meeting that they will meet a certain minimum threshold of metering. NERC should hold them accountable and sanction those who have not met the threshold.”
Mr Fashola further stated that he has gotten a lot of complaints about some DISCOs disconnecting those who have prepaid meters.
“For now I will keep the names of those DISCOs out of the media but next month if nothing is done by those DISCOs to address these issues I will publish their names.”
He also noted that the Federal Government is progressing in its road map to increase power across the country and appealed to the public to extend the Whistle Blowing Policy to power theft.
Nominated Chairman of Nigerian Electricity Regulatory Commission (NERC), Professor Akintunde Akinwande, says he will honour an invitation for screening by the Nigerian Senate after clearing with his current employer, Massachusetts Institute of Technology (MIT), USA.
A statement by the President’s spokesman, Femi Adesina, disclosed that Professor Akinwande had said he did not turn down the offer by President Muhammadu Buhari.
According to Adesina, the declaration is contained in a letter dated October 26, 2016, addressed to the Chairman of the Senate Committee on Power, Steel Development and Metallurgy, Senator Enyinnaya Abaribe and sent through the Special Adviser to the President on National Assembly Matters, Senator Ita Enang.
The letter reads in part: “News reports in Nigeria that I have rejected President Buhari’s nomination to be Chairman of Nigerian Electricity Regulatory Commission have been brought to my attention.
“I have the greatest respect for President Buhari. I am fully behind the change he has brought and is bringing to the way government business is conducted in Nigeria.
“I am deeply honoured that Mr President and his team thought me worthy for this important national assignment and sought me out for it.
“I am a tenured professor of electrical engineering at the Massachusetts Institute of Technology.
“As such, I am contractually constrained to seek formally the consent of the university for a leave of absence before presenting myself to the Senate for screening and if confirmed take on the assignment.”
Professor Akinwande apologised to the Senate Committee for not showing up for the screening process scheduled for Tuesday, October 25, noting that it was not out of disrespect for the institution.
The academic said he would be available for the screening after clearance from the MIT.
The Benin Electricity Distribution Company (BEDC) has criticised the judgement of a Federal High Court in Lagos which declared the present electricity tariff system being used by the 11 distribution companies in Nigeria void.
The Manager, Corporate Affairs, BEDC, Tayo Adekunle, stated this on Monday during an interview with Channels Television at the company’s headquarters in Benin City, the Edo State capital in south-south Nigeria.
He said that the court’s decision was inimical to the progress of the power sector.
However, a civil rights activist, Omobude Agho, has lauded the judgement of the court.
He accused the distribution companies of exploiting Nigerians with the new price regime.
The Nigerian Electricity Regulatory Commission (NERC) has said that it did not go against the court’s injunction on electricity tariff increase.
The Deputy General Manager, Head, Tariff and Rates of NERC, Mr Abdulkadir Shettima, said this on Sunrise Daily.
“We don’t think we did. In our understanding (of) the court order, the plaintiff didn’t sue as a class action, he sued on his behalf.
“For instance I am a customer, you are a customer (and) nobody consulted me. I personally feel that action by the plaintiff is going to set the industry back, it’s going to put problems or delay in getting electricity,” he said.
Understanding The Policy
The NERC official told Channels Television on Monday that the lack of understanding of the privatisation and reform policy was responsible for the reactions that have trailed the electricity tariff increase.
He said that the commission was yet to receive a certified copy of the judgement, insisting that all the required processes in the law were followed.
“I think it is lack of understanding from the policy behind this privatisation, the reform, and the growth of the electricity industry.
“The point is that we believed the person sued in his own capacity and his tariff was not increased. So we don’t believe that we flouted the injunction,” Shettima said.
The Federal High Court Sitting in Lagos has fixed May 31 to rule on the preliminary objections filed by the Eko Electricity Distribution Company, The Nigerian Electricity Regulatory Commission and the Attorney General of the Federation.
They are all listed as defendants in a suit filed by some aggrieved residents of Itire, Ijesa and Ikate communities in Surulere area of Lagos State.
The resident staged a peaceful protest in court on Monday to condemn the high electricity tariffs which they say does not match supply.
Justice Saliu Saidu has listened to the objections of the defendants who have challenged the jurisdiction of the court to hear the suit.
Counsel to the plaintiffs, however, said that the Federal Government needs to review the privatization process.