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Electricity cost to go up, as Nigerian govt finally approves tariff increase for DisCos

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The Nigerian Electricity Regulatory Commission (NERC) has announced that electricity companies in Nigeria can adjust their tariff upwards.

The new approval was scheduled to take effect from January 1, 2022, but had been delayed.

NERC noted that the present economic indices’ potential impact on electricity rates was considered before the approval.

NERC based the increase on the Performance Improvement Plans of the DisCos and indices such as gas price, inflation, exchange rate, US inflation rate, and available generation capacity.

A document cited by Ripples Nigeria published on the NERC website reads: “This regulatory instrument shall be cited as Multi-Year Tariff Order (MYTO-2022), which chairman, Sanusi Garba, and Vice-Chairman Musiliu Oseni signed on 29th December 2021.”

Part of the document explained: “Consequently, following the approval of PHED’s PIP on 30th April, 2021, the Commission issued the MYTO-2021 Extraordinary Tariff Order effective from 1st July 2021 in consideration on PHED’s CAPEX proposals over a 5-year plan in line with the approved PIP.

“Accordingly, this MYTO-2022 order restates PHED’s approved 5-year CAPEX and relevant assumptions applied to forecast revenue requirements and applicable tariffs for the period 2021-2026 in line with MYTO Methodology and Regulations Procedure for Electricity Tariff Reviews in the Nigerian Electricity Supply Industry (NESI).”

It is programmed from 1st July 2021 to 30th June, 2026.

The document showed that for the PHED (A-Non MD) customers who paid N56.16/kwh in January 2022 will now (February to December 2022) pay N60.67/kwh).

Read also :Blackout continues as DisCos waste 2,495.3MW of electricity, enough to power 20m homes

(B Non-MD) customers who paid N56.64/kwh in January 2022, will now pay N59.64/kwh.

While E- MD2 customers who paid N50.72/kwh in January 2022, will now (From February 2022) pay N54.22/kwh .

The approval of the new tariff follows the commission’s announcement in March that it would conduct a minor tariff review every six months to reflect the economic situation, especially the disparity between the naira and other major currencies, specifically the dollar.

In 2013, PHCN was broken down to 11 DisCos which are Port Harcourt Electricity Distribution Company (PHEDC); Jos Electricity Distribution Company (JEDC); Kano Electricity Distribution Company (KEDC); Kaduna Electricity Distribution Company (KEDC);

Others are Jos Electricity Distribution Company (JEDC); Ikeja Electricity Distribution Company (IKEDC) and Ibadan Electricity Distribution Company (IBEDC).

Ripples Nigeria had reported earlier that Nigerians’ electricity bill rose to 8-year high of N757 billion in 2021.

The payment made in 2021 is also a 46 percent increase from the N516 billion paid in 2020.

The report also showed an increase in the number of metered Nigerians to 10.01 million from 9.95 million in 2020.

Despite the increase, power generation continues to be below 5000mw.

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