Why electricity tariff increase is inevitable ― Jos Disco

Following a directive from the National Electricity Regulatory Commission (NERC) to all 11 electricity distribution companies (Discos) in Nigeria to increase their tariff, Jos Electricity Distribution has increased its tariff by 10 per cent and posited that the increase is inevitable and necessary to keep the Disco afloat.

The Head, Corporate Planning and Strategy of Jos Disco, Mr Oluwashola Ajala, who disclosed this in an interview with newsmen at the venue of a meeting with consumers over the new tariff in Jos said government has removed the subsidy on electricity to channel it into other critical sectors of the economy such as roads, health among others adding that, that was the main reason behind the increase of tariff.

He stated that the increase in tariff will also enable the Discos to address the issue of epileptic power supply adding that most of the assets which the Discos purchased in 2013 were obsolete and dilapidated as at the time of purchase.

“When the core investors came in, they discovered that the networks were in bad shape, some of them as old as 40 years. So there’s the need for a new brand of the network for a steady supply of electricity. This also forms part of the reason for an increase in tariff to attract investment and also for the government to remove subsidy.

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“Also, there’s no Disco that can tell you that it has made N1 profit since the beginning of the privatisation. The reason we are saying there’s no profit in the business is because some Discos have not been able to meet market obligations.

“Even last year National Electricity Regulatory Commission threatened to withdraw the licenses of about eight Discos, the reason being that they don’t have sufficient cash flow to run the organisations. So none of the Discos at the moment can tell you it is making a profit, they are all operating at a loss,” he said.

He enjoined consumers at all levels to understand the situation the Discos in the country found themselves based on the economic reality in the country adding the increase was not punitive measure as being speculated but geared towards reliable and efficient services to the consumers.

Ajala further declared that Jos Disco has increased its tariff by 10 per cent, from 29.81 Kobo to 32.90 Kobo for single-phase customers.