Business Latest

Increase in electricity tariffs begins Wednesday

Labour Congress wants Nigerian govt to retain 40% holdings in DisCos, GenCos

A new electricity tariff regime, which will effect increase in different electricity rate categories, begins tomorrow Wednesday 1st April 2020.

The new regulation had been announced last December during the Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 by the Nigerian Electricity Regulatory Commission.

“The Federal Government’s updated Power Sector Recovery Programme does not envisage an immediate increase in end-user tariffs until April 1, 2020, and a transition to full cost reflectivity by end of 2021.

“In the interim, the Federal Government has committed to funding the revenue gap arising from the difference between cost-reflective tariffs determined by the commission and the actual end-user tariffs payable by customers,” said the NERC.

Read also: Nigerian govt orders oil firms to reduce workforce after 6 workers contract coronavirus

According to the NERC during the December review, the directive was released to demonstrate the effects of the modifications in the minor review variables in deciding cost-reflective variables and appropriate tariff and market deficits for 2019 and 2020.

The directive also determined the minimum amounts payable by the distribution companies (Discos) in fulfilling their financial obligations on the basis of the allowed tariffs.

The NERC said all the Discos were duty bound to pay their bill fully as amended and netted off by appropriate tariff shortfall.

“All FGN intervention from the financing plan of the PSRP for funding tariff shortfall shall be applied through NBET and the market operator to ensure 100 per cent settlement of invoices issued by market participants.

“Effectively, this order places a freeze on the tariffs of the TCN and administrative charges until April 2020 at the rates applied in generating MO invoices for the period of January to October 2019,” the NERC said.

Join the conversation

Opinions

About the author

Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
www.ripplesnigeria.com

Do NOT follow this link or you will be banned from the site!