NERC To Begin Another Electricity Tariff Review

NERC To Begin Another Electricity Tariff Review

The Nigerian Electricity Regulatory Commission (NERC) has notified the public about the second revision of the electricity tariff this year, as it requested comments within 21 days.

In a notice it published on Wednesday, the power sector regulator said the rate review is for Distribution Companies (DisCos), Generation Companies (GenCos) and the Transmission Company of Nigeria (TCN).

What you should know about the increase in electricity rates
The north is the worst place to live in Nigeria – Sultan
The Daily Trust also reports that the review notice issued by the president, Professor James Momoh, would not be supervised by him, as he was due to leave office yesterday, November 26, after having turned 70, as specified by the Act. Reform of the Electric Power Sector. 2005.

The latest rate order known as the 2020 Multi-Year Rate Order (MYTO) was re-implemented on November 1, 2020 and rates increased by more than 50 percent for most consumers.

While that fee will expire in December, NERC could implement this revised fee by January 2021.

The Commission considers parameters during the review, such as inflation, the exchange rate of the US dollar to Naira, the price of natural gas and the available generation capacity. Higher inflation and especially the forex market could trigger a rate hike, our analysis shows.

NERC said that while the current MYTO 2020 addresses some DisC investment payback issues, there is still a gap.

“However, the problems presented by the DisCos in their application were not fully considered by the Commission, considering that no additional capital expenditure (CAPEX) was approved to meet the periodic service level commitments required to deliver energy to the clients in the different services bands. “

It was learned that the 11 DisCos have submitted their extraordinary rate revision proposals to NERC for the agency to add the CAPEX fund to the rate.

“Therefore, the Commission intends to continue with the ongoing extraordinary fee review for DisCos in addition to the mandatory minor periodic review,” confirmed NERC.

Source: – Daily Trust