NERC gives Disco free hand to propose tariff

Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi Wednesday said that the Electricity Distribution Companies (Discos) have got the permission to in consultation with the electricity consumers propose tariffs for customers.

Whatever tariff the companies propose, he said, will still be subject to the approval of the commission.

Amadi addressed journalists in Abuja after the commission’s monthly meeting with the Chief Executive Officers of the Shiroro Hydro Power and Ikeja Disco.

His words: “Finally, I will like to say that ultimately, the new tariff regulation makes it mandatory that the distribution companies will consult the consumers to establish the tariff they are proposing.

“It should be affordable and accessible. The idea now is that the regulator will a little bit take a more passive position and therefore the Discos will have to talk to the consumers and we will now review those proposals based on the outcome of the consultation.”

The chairman said that next week NERC would commence a public hearing on supply conditions with the Abuja Disco to make the consumers understand why there has been excessive drop in power supply and other constraints.

Amadi recognized that the electricity supply condition in the market has been poor “since the last four or five weeks due to shortfall in rainfalls for the hydros and of course shortfall of gas to power plants.”

He insisted that all the conditions necessary for increase in capacity are available; stressing that the commission was hopeful that in the next couple of weeks the situation will increase.

The chairman revealed that the meeting was centered on the issues of power supply following complaints about lesser hours of power supply arising from shortage of gas supply due vandalism and water shortage from the hydro part of the supply chain.

He expressed satisfaction with the level of market compliance as most of the companies are posting their guarantees and the bulk traders had activated about seven contracts.

Amadi said that there was also a review of the gas supply agreement which was being concluded, stressing that “we are satisfied with the level of compliance with the conditions of the Transition Electricity Market ( TEM) and we are also satisfied with how fast the TEM is moving.”

The expectation of power supply in the market, he said, has not been met due to low power supply, which has now resulted in the recourse to the procurement of embedded generation by such firms as Ibadan and Eko in the short term.

To remedy the dwindling power situation, the Managing Director, Ikeja Disco, Mr. Abiodun Ajipowobaje explained that the firms are working out modalities of providing power from other sources instead of solely relying on the national grid.

On the recently review tariff, Amadi explained that the tariff for residential consumers was not increased in January because it was frozen.

He noted that order that was issued on January 1st 2015 continued to be valid until April 1st when the new amendment would take place.

Amadi posited that consumers must pay the bills of power consumption before the amendment.

The amended order stipulates that the Disco should not transfer commercial losses to the consumers.

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