DisCos consider dropping proposed electricity tariff hike to 25% amid NERC approval delay

Electricity distribution companies (DisCos) in Nigeria may eventually settle for a 25% hike in electricity tariff if the National Electricity Regulatory Commission (NERC) and other stakeholders refuse to agree to a 40% increase.

This is according to a source who spoke with Legit.ng following a series of negotiations that have been ongoing between the DisCos, NERC and other stakeholders in the Federal Capital Territory, Abuja.

It would be recalled that Legit.ng reported two weeks ago that 11 DisCos had approached NERC, seeking a review of electricity tariffs, citing losses from incurred from fluctuating exchange rates, among economic conditions.

It added that the request for rate review is necessary to incorporate changes in macroeconomic parameters as well as other factors that affect the quality of the service, operations, and sustainability.

The planned tariff hike has however elicited outrage by Nigerians expressing their distress over the already burdensome higher petrol prices, elevated food costs, and increased transport fares, all of which were triggered by the recent fuel subsidy removal.

Discos facing challenges ahead of imminent tariff review

According to the source who pled anonymity, getting approval from NERC for a 40% hike in tariff has been very difficult for DisCos, following protests by Nigerians who are already groaning from the economic woes brought about by the removal of fuel subsidy and depreciating naira.

He told Legit.ng: Reviews are supposed to be done every six months according to the law, but this time around, it has proven to be unsuccessful. This is due to protests coming from many quarters including consumers and other stakeholders.

He added that some DisCos are beginning to consider bringing down the proposed hike to about 25%, just to seem considerate to the current economic situation.

He said: In the course of the meetings, some DisCos are beginning to consider dropping the proposed 40% hike to about 25%. They argue that if an upward review is not allowed, they might run at losses and may not be able to efficiently operate.

While NERC has stated that the application by the power firms for a review was in accordance with the rules as it is contained in the Electricity Act 2023, the National Assembly has raised objections.

Deliberating on the matter, the Nigerian Senate has urged the Federal Government to intervene and suspend the proposed electricity tariff hike initiated by the DisCos.