NERC orders DisCos to hike electricity tariff

The Nigerian Electricity Regulatory Commission (NERC) has ordered electricity distribution companies (DisCos) to hike their tariff from January 1, 2020.

According to NERC in a statement on its website, it told the 11 DisCos that this order supersedes “other orders issued on the subject matter, and shall take effect from 1st January 2020 and shall have an effect on the issuance of a new Minor Review Order or an Extraordinary Tariff Review Order by the NERC.”

NERC said the order has taken into consideration the actual changes in relevant macroeconomic variables and available generation capacity as at October 2019 in updating the MYTO operating -2015 Tariff Order for 2019 in line with the provisions of the amended MYTO Methodology.

It said that projections are made for the variables for the Year 2020 and beyond based on the best available information.

The commission, however, based adjustments in the tariff on the relevant data it obtained from the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS) such as average monthly inflation rate of 11.3 per cent, the exchange rate of N309.97.

It also added that it obtained its data on the inflation rate from the US rate of inflation, which projected 1.8 per cent for the period of January to October 2019.

NERC added that “All DisCos are obligated to settle their market invoices in full as adjusted and netted off by the applicable tariff shortfall.

It noted that “in the determination for compliance to the minimum remittance threshold in this Order, the commission shall consider verified receivables from MDAs for the settlement period and DisCos’ historical collection efficiency for MDAs.

“The commission shall hold the TCN responsible for deviation from the economic dispatch Order that adversely impact on the base weighed average cost of the wholesale of energy.

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

“Under this framework, the minimum market remittance by AEDC is determined after deducting the revenue deficient arising from tariff shortfall from the aggregate NBET and MO market invoices.

“AEDC shall be availed the opportunity to earn its revenue requirement only upon fully meeting the following obligations and subject to efficient operations.”

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Written by Olajire Taofeeq

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