Electricity tariff hike imminent as NERC concludes ‘extraordinary review’

The Nigerian Electricity Regulatory Commission (NERC) says it is concluding the Extraordinary Tariff Review process for the 11 Electricity Distribution Companies (DisCos).

NERC, which is the regulator of Nigeria’s power sector, made this known on Monday in a notice to the general public and industry stakeholders posted on its website.

The commission said the review was pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA).

According to NERC, extraordinary tariff reviews are carried out in instances where industry parameters have changed from those used in the operating tariffs to such an extent that a review is urgently required to maintain the viability of the industry.

The commission said it would also commence the processes for the July 2021 Minor Review of the Multi-Year Tariff Order (MYTO-2020), which is done every six months.

NERC said the reviews would put into consideration changes in inflation, foreign exchange, gas prices and available generation capacity.

The commission said it would also consider Capital Expenditure (CAPEX) required to evacuate and distribute the said available generation capacity in accordance with EPSRA and other extant industry rules.

“Further to the above, the commission held series of public hearings and stakeholder consultations in the first quarter of 2020 on the Extraordinary Tariff Review Applications of the 11 DisCos to consider their respective five-year Performance Improvement Plans (PIPs).

“However, the evaluation of the DisCos’ requests for review of the CAPEX proposed in their PIPs could not be concluded for the consideration of the commission during the Minor Reviews undertaken in 2020.

“Specifically, Section 21 of the MYTO – 2020 Order provides for consideration of DisCos’ CAPEX application upon further scrutiny and evaluation of the investment proposals,” it said.

NERC said the notice was being issued in compliance with the provisions of EPSRA, the Business Rules of the commission and the Regulations on Procedures for Electricity Tariff Reviews in the Nigerian Electricity Supply Industry.

The commission said it was aimed at soliciting for comments from the general public and stakeholders on the proposed reviews and advised them to send their comments to NERC’s headquarters in Abuja within the next 21 days.