The Federal Government through the Nigerian Electricity Regulatory Commission (NERC), has approved an increase in electricity tariff by 120 per cent effective from January 1, 2021
In an order to the 11 electricity issued and signed by NERC Chairman, Engr. Sanusi Garba, on December 30, 2020, stated that the new order supersedes ORDER/NERC/2028/2020and shall take effect from January 1, 2021 and shall cease to have effect on the issuance of a new Minor Review Order or an Extraordinary Tariff Review Order by the Nigerian Electricity Regulatory Commission (NERC).
According to a copy of the order sited by ENERGY TIMES, a consumer who pays N22 per kilowatt under Ibadan Electricity Distribution Company for instance, before now will pay N62 per kilowatt of power.
NERC said before arrived at the minor review of the revised MYTO-2020 Order, considered the impact of inflation rates (Nigeria and USA), foreign exchange rate (NGN/USD), gas prices, available generation capacity and material variances to the accompanying CAPEX and OPEX required for the evacuation and distribution of available generation capacity.
In line with the MYTO Methodology, the CBN official exchange rates plus a premium of 1 % were used for the retroactive review of the year 2020. Accordingly, average NGN/USD exchange rate (+ 1 %) for the period 1 •1 January 2020 to 151h December 2020 of N360.8 was used to review the year 2020 tariffs. The NAFEX closing NGN/USD exchange rate (+ l %) of N397.44 as at 29’h December 2020 was adopted to project NGN/USD exchange rate for 2021 and beyond.
Accordingly, this Order is issued to reflect the impact of changes in the Minor Review variables as indicated in section 7 of this Order and used relevant projections based on best available information in the determination of cost reflective tariffs (CRT) and relevant tariff shortfalls for the year 2021. In December, 2020, NERC notified that it had begun a review for another tariff, which has been completed and had taken effect from January 1, 2021.
NERC had raised tariff for the DisCos in September but that drew outrages from customers and the organised labour, prompting the federal government to suspend it while parties dialogued.
By November 1, 2020, the suspended tariff was implemented after some discounts were given for customers who get 12 hours and above power supply daily.
However, those with less than 12 hour supply did not get a tariff hike, according to the NERC order of November 2020. They remained at N4per kilowatts of power.