Controversies trail July 1 commencement of new electricity tariff regime

Controversies seem to be trailing commencement of the new electricity tariff regime by July 1st, as the electricity Distribution Companies (DisCos) on Sunday, accused the Nigerian Electricity Regulatory Commission (NERC) of distancing itself from the planned increase.

They described the Regulator’s “unusual silence” as “unfair” especially when NERC is responsible for downward or upward review of electricity tariffs.

The umbrella body of the 11 DisCos, Association of Nigerian Electricity Distributors (ANED) in a statement issued by its Executive Director, Research and Advocacy, Mr Sunday Oduntan explained that a proposal for the review of the tariff was submitted to the Commission which is approved.

He said the DisCos recently received a letter from the Commission, dissociating itself and the Federal Government (FG) from any public communications on tariffs.

Oduntan argued that the decision on the new tariff was not unilateral taken by the DisCos but with NERC’s consent.

“We are in a regulated sector. We cannot make a decision about a very critical aspect of the sector like tariff without a nod from the regulator (NERC).

“However, what has happened in recent days is that our regulator is warning us not to mention their name or the Federal Government in any of our communication about the tariff increase with our customers. This is certainly very unfair.

“Hence we were surprised to receive a letter from NERC to all the DisCos warning them not to mention their name or that of the Federal government in any public communications on tariffs”, he said.

He noted that while it is DisCos’ obligation to communicate increase, this followed standard processes of tariff adjustments in the sector with approvals from NERC and the FG.

“As DisCos, we believe in the rule of law. We will only carry out lawful approval and instructions by our regulator.”

Oduntan reminded that NERC’s latest disposition may likely cause public resistance, “effectively setting DisCos up to fail.”

He added that all the DisCos had started communicating the new tariff regime, a week before saying; “The communication was geared at enlightening customers about the details of the service based tariff increase to ensure customers were fully aware of how it pertained to them and the supply band they fall under.

“The truth is that we are the public-facing arm of the sector, but what we collect is shared by everybody, including NERC.

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“Our interest is in the nurturing of a commercially viable power sector. Political considerations and bickering will certainly not take us there,” Oduntan concluded.

When contacted, NERC’s Acting Head of Public Affairs Unit, Mr Michael Faloseyi who declined comments on the issue, told TribuneOnline that the Commission would not discuss regulatory issues on pages of the Newspapers.

“We do not regulate on the pages of the newspapers and we don’t join issues with anyone on the pages of the Newspapers especially when it comes to regulatory issues,” he said.

However, a highly placed source in the Commission, denied claims that it was backing out of the tariff increment move, stressing that its statutory responsibility was to approve or disapprove any tariff review application.

The Source insisted that it was the responsibility of the DisCos, to market the new tariff to their customers.

“We are also telling them, go and convince your customers. Is anything wrong in that? DisCos should not drag NERC into this. You are the one selling the product and NERC is not backing out.

“We have specific responsibilities, ours is to approve, you have applied. The last time they applied, we told them, go and market your tariffs to your customers. Go and convince them, let them know the reason they are paying more. Is anything wrong with that? Does that now mean that we are shying away?”, the source queried.

On NERC’s stance on the July 1 new tariff commencement date, he said: “It is not about we supporting or not supporting the July 1 commencement, we will look at the merits of the two and judge. We are like a referee so if we are now the one marketing it, how do you now trust us? It is between the customers and the service provider.”

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