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General News of Thursday, 19 January 2023


DisCos’ latest electricity tariff hike lawless, stakeholders demand reversal

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Condemnation has continued to trail the increase in electricity tariffs by power distribution companies (DisCos), with consumer groups and industry experts describing the hike as illegal and arbitrary, calling for immediate reversal of the increase.

The experts, who spoke in Lagos on Thursday, said the sudden increase was illegal.

“There’s no noble reason for the perennial and, at times, secret increase in electricity tariff by the DisCos beyond their inhuman exploitation. Profit, not service, is the focus of these organisations that always breach all rules of engagement with impunity, and the government is condoning such barefaced robbery and lawlessness,” stated Sina Odugbemi, the national coordinator of the WhereIsTheLight (an advocacy group).

Mr Odugbemi added, “This points out the evil of privatisation of public utilities while still using public funds to sustain the same enterprise sold to few privileged individuals.”

Yemi Oke, a legal consultant and energy adviser, described the electricity tariff hike as “the lawlessness of the highest order” and said, “we’ve been reduced to nothing as a people and businesses.”

He condemned the electricity company for not having “even the decency or courtesy of information, and adequate notice” to give the public before the hike.

“Tariff methodologies have statutory bases. NERC has regulations, but it is violating its own regulations by failing to ensure effective regulation of this vital sector. Part of regulatory efficiency is to set clear rules and guidelines with clear benchmarks,” Oke explained.

“A prudent regulator will not encourage or condone clandestine increase in tariffs. It’s all a failure of direction, leadership and regulation.”

Oke pointed out that instead of increasing the “supply net, we’re over-tasking and over-billing the few existing customers,” stressing that every increase in electricity tariff must follow a Multi-year Tariff Order (MYTO).

Samuel Ilori, the national coordinator of All Electricity Consumers Protection Forum, said the regulatory body gave no genuine reason before approving the tariff increment.

“In 2016, when the first major increase was done using MYTO schedule 2014, it was glaring that the then minister approved the increase to satisfy the yearning of the Discos,” Ilori explained.

“Because they said they were not meeting their targets and could not break even, hence the then minister said it was inevitable and dubbed it ‘bitter pill’ Nigerians must swallow even though its approval was in violation of section 76(2)(b) of electric power sector reforms Act, 2005.”

He advised the federal government “not to renew the almost expired 10-year performance agreement of November 3, 2013, signed with the DisCos by the then-President Goodluck Jonathan administration.

Ilori said the impression that there was a 100 per cent increase in tariff this new year was wrong but that there was a systemic fraud pre-approved by the NERC to serve as a minor review window legally provided by the MYTO schedule 2014.

He said the MYTO stipulated that a minor review must be requested by the DisCos every six months after fulfilling some conditions.

“The fraud inherent is that, instead of that bi-annual minor review, the NERC has approved beforehand unilaterally a periodic increase from January to December of each year up to 2027 for each DisCo without informing the other stakeholders,” Mr Ilori revealed. “Hence, by the documents from NERC, this increment will be witnessed every year from January each year to 2027. That’s how insensitive the regulatory body has become and the disdain they have for Nigerian electricity consumers.”

Ilori mentioned that his group “are prepared to go to court again to challenge the propriety of NERC in granting approval and also demand reversal as well as (a) refund of all illegal charges to consumers on the basis of yearly tabular increase in the order 205/2020 of September 2020.”

However, Adetayo Adegbenle, the executive director of Power up Nigeria, said the MYTO document stipulated two tariff reviews annually, stating that “instead of protesting and complaining if it is not going down well with Nigerians, let us approach the National Assembly to get this reviewed.”

Adegbenle explained that Nigerians should note that the gradual subsidy removal in electricity tariffs “has been successfully implemented.”

Tinuade Sanda, the managing director of Eko Electricity Distribution Company (EKEDC), justified the electricity tariff increase within its network.

Sanda explained that the recent tariff hike only covered consumers under bands A and B (customers who are under the service of 16 to 20 hours of power supply on average), revealing that the average increase was in the region of N8.

She said foreign exchange and an increase in gas prices also contributed to the tariff increase.

Efforts to speak with NERC were unsuccessful despite making calls and sending text messages to the agency’s officials.