elec­tric­ity tar­iffs will in­crease april 1, says nerc

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The Nige­rian Elec­tric­ity Reg­u­la­tory Com­mis­sion has said the elec­tric­ity tar­iffs be­ing paid by con­sumers will in­crease in April this year.

NERC dis­closed this in its De­cem­ber 2019 Mi­nor Re­view of Multi-year Tar­iff Or­der 2015 and Min­i­mum Remit­tance Or­der for the Year 2020.

It said the or­der was is­sued to re­flect the im­pact of changes in the mi­nor re­view vari­ables in the de­ter­mi­na­tion of cost-re­flec­tive tar­iffs and rel­e­vant tar­iff and mar­ket short­falls for 2019 and 2020.

The com­mis­sion said the or­der also de­ter­mined the min­i­mum re­mit­tances payable by the Dis­cos in meet­ing their mar­ket obli­ga­tions based on the al­lowed tar­iffs.

It said, “The Fed­eral Gov­ern­ment’s up­dated Power Sec­tor Re­cov­ery Pro­gramme does not en­vis­age an im­me­di­ate in­crease in end-user tar­iffs un­til April 1, 2020, and a tran­si­tion to full cost re­flec­tiv­ity by end of 2021.

“In the in­terim, the Fed­eral Gov­ern­ment has com­mit­ted to fund­ing the rev­enue gap aris­ing from the dif­fer­ence be­tween cost-re­flec­tive tar­iffs de­ter­mined by the com­mis­sion and the ac­tual end-user tar­iffs payable by cus­tomers.”

Ac­cord­ing to NERC, all Dis­cos are ob­li­gated to set­tle their mar­ket in­voices in full as ad­justed and net­ted off by ap­pli­ca­ble tar­iff short­fall.

It said, “All FGN in­ter­ven­tion from the fi­nanc­ing plan of the PSRP for fund­ing tar­iff short­fall shall be ap­plied through NBET and the mar­ket op­er­a­tor to en­sure 100 per cent set­tle­ment of in­voices is­sued by mar­ket par­tic­i­pants.

“Ef­fec­tively, this or­der places a freeze on the tar­iffs of TCN and ad­min­is­tra­tive charges un­til April 2020 at the rates ap­plied in gen­er­at­ing MO in­voices for the pe­riod of Jan­uary to Oc­to­ber 2019.”

Ac­cord­ing to NERC, the mi­nor re­view vari­ables are Nige­rian and the United States in­fla­tion rates, naira-dol­lar for­eign ex­change rates, gas prices and avail­able gen­er­a­tion ca­pac­ity.

Mean­while, Nige­ria’s elec­tric­ity grid col­lapsed four times in the fourth quar­ter of 2019, the lat­est fig­ures ob­tained from the Fed­eral Min­istry of Power showed.

It was also ob­served that the to­tal quan­tum of en­ergy gen­er­ated on the grid dur­ing the pe­riod un­der re­view hit the high­est peak of 5,156.9 megawatts on Novem­ber 19, 2019.

Although the high­est power gen­er­a­tion dur­ing the fourth quar­ter was recorded in Novem­ber, the grid wit­nessed two col­lapses in the same month.

In De­cem­ber, the grid col­lapsed twice, af­ter it had recorded a peak power gen­er­a­tion of 4,124.3MW on De­cem­ber 1.

In its re­port on im­ple­men­ta­tion mile­stones of the Trans­mis­sion Re­ha­bil­i­ta­tion and Ex­pan­sion Pro­gramme from Fe­bru­ary 2017 to Oc­to­ber 2019, the Trans­mis­sion Com­pany of Nige­ria stated that since May 2019, the grid was un­sta­ble due to poor dis­tri­bu­tion net­works, a claim which power dis­trib­u­tors coun­tered.

The TCN is owned by the Fed­eral Gov­ern­ment and it is the only com­pany, out of the 18 suc­ces­sor com­pa­nies un­bun­dled from the de­funct Power Hold­ing Com­pany of Nige­ria that was not pri­va­tised.

Although the TCN stated that the in­sta­bil­ity of the grid was due to poor dis­tri­bu­tion net­works, power dis­trib­u­tors coun­tered the claim by the trans­mis­sion com­pany.

Speak­ing on be­half of power dis­trib­u­tors un­der their um­brella body, As­so­ci­a­tion of Nige­rian Elec­tric­ity Dis­trib­u­tors, the Ex­ec­u­tive Di­rec­tor, Re­search and Ad­vo­cacy, Sun­day Odun­tan, faulted the TCN’S claim.

He said power dis­trib­u­tors re­cently pub­lished the facts about the mat­ter while re­fer­ring to the Dis­cos’ ear­lier state­ment that the TCN still had a lot to ad­dress.

•L-r:en­ergy Fi­nance Spe­cial­ist, Ro­lake Akinkugbe-fi­lani; Chief Ex­ec­u­tive Of­fi­cer, ENYO Re­tail and Sup­ply Lim­ited, Abay­omi Awobokun; La­gos State Com­mis­sioner for En­ergy and Min­eral Re­sources, Olalere Odu­sote; Chair­man, ENYO Re­tail and Sup­ply Lim­ited,tunde Fo­lawiyo; and Chief Ex­ec­u­tive Of­fi­cer, Trans­port Ser­vices Lim­ited, Deji Wright, dur­ing the in­au­gu­ral Enyo Correspond­ents Break­fast Ses­sion in La­gos... on Fri­day. Photo: ENYO Re­tail and Sup­ply Lim­ited

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