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Thursday, June 24, 2021
Home Upstream Industry Why we cannot exclude NERC's role from tariff increase communication - ANED

Why we cannot exclude NERC’s role from tariff increase communication – ANED

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The Electricity Distribution Companies (DisCos) have decried the recent attempt by their regulatory body, the Nigerian Electricity Regulatory Commission (NERC) to distance itself from theJuly 1 commencement of a new service based electricity tariff regime.

This position was contained in a statement released over the weekend by their umbrella body, the Association of Nigerian Electricity DIstroibutors (ANED), signed by its Executive Director of Research and Advocacy, Barr. Sunday Oduntan.

“We are in a regulated sector. We cannot take 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.”

“Many stakeholders have expressed their concern at the unusual silence of our regulator, NERC on the upcoming increase and it looks like a unilateral decision by the DISCOS. “We’ll like to inform Nigerians that tariff review (upward or downwards) is the primary responsibility of NERC as our regulator. We are required to submit our proposals and they have the final say. 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”.

“While it is our obligation to communicate the increase, it is also important for customers to know that it is following 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.” “The proposed increase and the timing of the increase in tariffs was done by NERC. It is their statutory responsibility. DISCOS alone cannot fix and approve Electricity tariffs”.

“We are very sensitive to the feelings and yearnings of our customers during this period of COVID-19. To demonstrate our sensitivity, Nigerians will recall that the DISCOS, in conjunction with the National Assembly came out to suggest a two-month free Electricity supply for our residential customers but the proposal was not approved by the Federal government due to paucity of funds occasioned by the reduction of National incomes from sales of crude oil.” “The fact that the action is deliberately made to look unilateral is capable of creating public resistance, effectively setting DISCOS up to fail,” Oduntan said.

All DisCos had started communicating the new tariff regime, set to take effect from July 1, 2020, since last week. The communication were geared at enlightening customers about the details of the service based tariff increase to ensure customers were fully aware about 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”. “Our interest is in the nurturing of a commercially viable power sector. Political considerations and bickering will certainly not take us there,” Oduntan concluded.

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