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Why new electricity tariff hike was suspended – ANED

By Obas Esiedesa

The Association of Nigerian Electricity Distributors (ANED) has explained that economic hardship faced by customers occasioned by the Covid-19 pandemic was the reason for the suspension of the new service reflective electricity tariff increase.

The tariff was scheduled to commence July 1, before the leadership of the National Assembly intervened.

ANED in a statement by its Executive Director, Research and Advocacy, Barr. Sunday Oduntan, explained the call for the suspension of the proposed service reflective tariff was initiated by the National Assembly on Monday due to their concerns on its timing and what they saw as lapses in the internal workability of the plan within the sector.

Oduntan faulted news report that claimed that the electricity distribution companies (DisCos) initiated to move to have the new tariff regime suspended.

He explained that DisCos has worked over the years to have a cost reflective tariff for the electricity industry, wondering they could have worked against it on the eve of its implementation.

“I am sure that right now, several attempts at justifying this conspiracy theory are being cooked up but what the journalist that wrote the story is actually insinuating is that the leadership of the National Assembly can easily be manipulated by anyone or group of people.

“The members of the National Assembly are representatives of the people. Based on the feedback they have been getting from their constituents mainly around the difficult financial realities, they called for a meeting which we attended and during the meeting, they laid out their concerns,” Oduntan said.

He added: “DisCos have spent the last couple of weeks carrying out massive sensitizations across different platforms preparing their customers for the new service reflective tariff as instructed by the Nigerian Electricity Regulatory Commission (NERC). DisCos have also been at the forefront of the call for a reviewed tariff for years.

“Over the weekend, we had to publicly voice out concerns about an instruction from our regulator which we felt will make our task of winning public confidence more difficult because we have committed ourselves to removing obstacles that will stand against the success of the take-off date. It is therefore extremely disingenuous for someone to come and suggest that on the eve of this coming to fruition, we will now be the ones to initiate its postponement”, he stated.

July 1, 2020 had been pegged as the commencement date for a new service delivery based tariff regime. Based on the recommendation of the NASS leadership, the new regime should take effect from the first quarter of 2021.

The deal between the DisCos and the leadership of the National Assembly was later backed by President Muhammadu Buhari following a meeting at the State House, Abuja with legislators.

Speaking to State House correspondents after meeting separately with President Buhari and Vice-President Yemi Osinbajo, Senate President Ahmed Lawan and Speaker of the House of Representatives, Femi Gbajabiamila, affirmed that the effective date of the hike has to be postponed.

According to Gbajabiamila, both President Buhari and Osinbajo were on the same page with the National Assembly leadership on the deferment of the hike given the effects of the Covid-19 pandemic on the people.

The Speaker said: “I will like to say that I think we have all agreed on an increase in cost reflective tariff but the issue is that the timing is also important. Sometimes, timing is more important than even the policy decision that you make.

“There is a saying that the road to hell is often paved with good intentions. So the intention is good but what about the timing?

“We have all agreed to suspend this for a while, tarry a while and get the buy-in of the people, explain to the people why this has to be done, that it is for the betterment for the electricity to get stable”.

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