By Eyo Nsima
Barely less than one day to the much-talked-about July 1, 2023 electricity tariff increase in Nigeria, consumers continue to recharge more than before, hoping to cut costs when it becomes operational.
Checks by The Daily, www.thedaily-ng.com, indicated that many customers, including households and organisations have intensified efforts to recharge their prepaid meters.
It also showed that the Nigerian Electricity Regulatory Commission, NERC and the Electricity Distribution Companies, DisCos have concluded arrangements for the smooth implementation of the rate.
But at the time of writing, all eyes were still looking at the direction of President Bola Tinubu to endorse the review implementation.
Informed sources at NERC and the DisCos said the tariff review is a must as it is targeted at enabling operators in the electricity value chain to cover costs associated with inflation, foreign exchange and rise in energy prices among others.
However, the sources are uncertain if the President will grant approval soon or later.
Meanwhile, in a report obtained from its website, NERC, stated: “One of the primary functions of the Commission as contained in Section 32 (d) of the Electric Power Sector Reform (EPSR) Act, 2005 is to ensure that the prices charged by licensees are fair to customers and sufficient to allow the licensees to finance their activities and obtain reasonable profit for efficient operations.
“In pursuant to the authority given under Section 76 of the EPSR Act 2005, the Commission established a methodology for determining electricity tariff in the Nigerian Electricity Supply Industry (NESI) and subsequently issued a Tariff Order called the Multi-Year Tariff Order (MYTO) that sets out tariffs for the generation, transmission and distribution of electricity in Nigeria.
“The Multi-Year Tariff Order (MYTO) is a tariff model for incentive-based regulation that seeks to reward performance above certain benchmarks, reduces technical and non-technical/commercial losses and leads to cost recovery and improved performance standards from all industry operators in the Nigerian Electricity Supply Industry.
“It is used to set wholesale and retail prices for electricity in the industry by employing a unified way to determine total industry revenue requirement that is tied to measurable performance improvements and standards.”
It added: “The purpose of the MYTO is to set cost-reflective tariffs which will allow the power sector to be properly funded and functional. It provides a 15-year tariff path for the NESI with limited minor reviews each year in the light of changes in a limited number of parameters (such as inflation, interest rates, exchange rates and generation capacity) and major reviews every 5 years when all of the inputs are reviewed with stakeholders.”
