Home News Senate rolls out 11 recommendations for electricity tariff hike

Senate rolls out 11 recommendations for electricity tariff hike

by Business News Report

The Senate Committee on Power has advised pausing the proposed increase in electricity tariffs. The recommendation was made when Senator Enyinnaya Abaribe, the Committee’s chairman, delivered the report during a plenary session. Many senators praised the Committee’s work and called President Bola Tinubu to halt the tariff hike. However, further discussions were postponed as a federal high court in Kano is considering the matter. According to Arise TV online, the Committee in the report, recommended, among others that the Nigerian Electricity Regulatory Commission (NERC) should suspend the ongoing implementation of the Multi-Year Tariff Order (MYTO) 2024.  The panel also recommended that the NERC fully comply with the mandatory requirement of stakeholder consultation under Section 48 of the Electricity Act, 2023, regarding future regulatory decisions to avoid a repeat of the confusion and public outcry that followed the recent tariff increase. The Ministry of Power and NERC should adopt measures to address the problem of power scarcity holistically rather than its preoccupation with price manipulation, which has proven to be counterproductive. 

That NERC should hold the Discos accountable on Key Performance Indicators (KPIs), including failure to deliver on capital expenditure and operating expenditure allocations, customer metering obligation under the Electricity Act, 2023, essential customer service obligations including customer sensitisation, implementation of energy credits for customers who invested in transformers meters and other assets on the Disco networks. Rate designs should only be cost-reflective if they properly account for the relevant macroeconomic environment that determines the affordability of electricity to the different segments of the market. The federal government metering intervention should be encouraged and intensified to address the current metering gap of 6.3 million.

The federal government must pursue this without prejudice to the statutory obligation of Discos to meter their customers as provided under Section 68(1)(b) of the Electricity Act, 2023. In this regard, the President should be commended for introducing the Presidential Metering Initiative (PMI). It further advised the Ministry of Power to intensify efforts to honour the subsisting contract with Ziklagsis Networks Ltd (ZNL) for the manufacture, supply, installation, management, and maintenance of Pre-Paid Meters (PPMs) in Nigeria. It should also intensify efforts on the recent Tripartite Metering Project Consortium Agreement between ZNL, De-Haryor Global Services Limited, and the Nigerian Army dated September 7, 2023, which was signed by ZNL for the metering of Army Barracks and other Military Facilities or, alternatively, refund the initial funding to the Federal Government. Vigorous implementation of power decentralisation provided for under the Constitution of the Federal Republic of Nigeria, 1999 (As Amended) and the Electricity Act, 2023, should be encouraged to relieve the Federal Government of the pressure to electrify every nook and cranny of this country. The Senate Committee further recommended that the Ministry of Power establish an Electricity Consumer Protection (ECP) Unit to develop, implement, and enforce the ECP component of the Electricity Act of 2023.

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