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Why NERC suspended new electricity tariff for 2 weeks – Akpeneye

By Obas Esiedesa

The Nigerian Electricity Regulatory Commission (NERC) on Wednesday explained that it ordered suspension of the recent tariff increase in public interest, following a directive from the Minister of Power.

NERC Commissioner, Legal Licensing and Compliance, Mr Dafe Akpeneye, disclosed this at the virtual 2020 Businessday Energy Series – Fuel of the Future (Gas) Summit.

The Commission had Tuesday night suspended the implementation of the new Service Based Electricity Tariff increase for two weeks.

The suspension follows the agreement reached between the Federal Government and organized labour on Sunday night that led to the cancellation of nationwide industrial action by workers to protest the increase in electricity tariff and the pump price of petrol.

NERC in an Order directed electricity distribution companies to suspend the tariff increase.

The Order which was signed by NERC Chairman, James Momoh and Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye said “This Order shall take effect from 28h September 2020 and shall cease to effect on the 11th October 2020”.

Akpeneye at the summit said the suspension would enable further consultations and finalisation of negotiations between the Federal Government and labour unions which kicked against the tariff hike.

He said: “The gesture was done in good faith by the government and NERC as a regulator is bound by Section 33 of the Electric Power Sector Reform Act 2005, to comply with general policy directions concerning electricity from the minister.

“It says the commission shall take into consideration in discharging its functions under section 32(2), provided that such directions are not in conflict with this Act or the Constitution of the Federal Republic of Nigeria.

“Looking at the overriding public interest on this issue, we saw that this is a valid policy directive and we issued the order to suspend the tariffs review from Sept. 28 to Oct. 11, to enable parties continue with their negotiations.”

According to him, the Multi Year Tariff Order (MYTO) 2020, was approved by NERC for the DisCos with effect from Sept. 1 after series of dialogue with all stakeholders in the industry.

He noted that the last MYTO was done in 2015 but became effective in 2016.

Akpeneye added that the new review was done to ensure that rates charged by DisCos were fair to customers.

He said it was also to ensure that DisCos operate efficiently to recover the full cost of their activities, including a reasonable return on the capital invested in the business.

The commissioner explained that the rationale behind the SRT was to ensure that the issue of blank increment in tariffs for all customers was removed.

“The SRT is an innovation to remove unfairness in billing customers. The customers have been placed in Bands A, B, C, D and E depending on their hours of electricity supply.

“Only customers enjoying daily supply of 12 hours of electricity and above (Bands A, B and C) are affected by the increment and the DisCos must guarantee these hours of supply to the locations,” he said. (NAN)

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