A new tariff increase for Electricity Distribution Companies (DisCos) across the country has been approved by the Nigerian Electricity Regulatory Commission (NERC). With this new increase, Nigerians are now expected to pay more for power consumption across the country.
The commission made this known on Wednesday, August 21st in a series of publications tagged ‘2016-2018 minor review of the 2015 multi-year tariff order’ (MYTO) for each DisCo.
According to the documents, the order became effective from July 1, 2019. The DisCos had cited lack of cost-reflective tariff as its major challenge on the sector, which has also prevented them from investing in their networks.
In 2018, the DisCos claimed they are incurring huge losses as they buy electricity at N80.88 and sell to consumers at N31.50, recording a shortfall of N49.38 per kilowatt.
“The objectives of this Order are to reflect the impact of changes in the Minor Review variables for the period 2016 2018 to determine the cost-reflective tariffs for the relevant years; and to ascertain revenue shortfalls in view of the differential between such tariffs and allowed tariffs in the Nigerian Electricity Supply Industry (“NESI”),” NERC said.
“Determine and recognize the historical (2015 2018) tariff deficits pursuant to the objective of resolving the impairment of the financial records of DisCos arising as a consequence of the deficits.
“This Order has taken into consideration the actual changes in relevant macroeconomic variables and available generation capacity in updating the operating MYTO 2015 Tariff Order for the period January 1, 2016, to December 31, 2018, in line with the provisions of the MYTO Methodology (Amended). Projections were made for macroeconomic variables for the year 2019 and beyond based on best available information.
“The Commission shall make necessary adjustments to reflect actual values at the time of the next minor review that will take effect on 1 January 2020.”
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