Nigeria’s electricity firms subtly hike tariff by 19%, as consumers condemn DisCos

Electricity distribution companies otherwise known as DisCos have quietly raised the tariffs for electricity consumption across the country as consumers raised alarm over the hike.

While the increase in tariff was not made public by the DisCos, electricity users have spoken out against the move, calling it “a perfect robbery” in light of Nigeria’s current economic realities, according to a report by The Punch.

Oye Sola, a resident of a Lagos highbrow estate, expressed his displeasure with the price increase, noting that: “The electricity
tariff is now N72.2 per unit,” he said.

The consumer claimed another price increase from N66 was effected secretly and expressed fear it might again be hike to N100 soon.

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“They are just milking us,” said another Ikeja Disco customer, Ola Busari. This is a flawless robbery. Discos must be inspected.

“They increased prices without informing us,” said another Lagos resident named Olojede.

“As our estate representatives, we received no official communication.”

The Nigerian Electricity Regulatory Commission (NERC), on the other hand, provides a 15-year tariff path for the Nigeria Electricity Supply Industry in its Multi-Year Tariff Order, with only minor revisions each year.

It states that reviews are conducted in response to changes in a limited number of parameters such as inflation, interest rates, exchange rates, and generation capacity, with major reviews occurring every five years after all inputs have been reviewed with stakeholders.

NERC, on the other hand, did not announce the most recent tariff increase, which a power distribution company attributed to the regulator on Wednesday.

Oyibo Ediri, a Twitter user, accused the Abuja Electricity Distribution Company of quietly raising the tariff in December, claiming that the company increased the rate for non-maximum demand customers by N12.65.

“AEDC has quietly raised electricity prices. Tariff band A non-MD cost increased from N57.55 in December to N68.2.

There has been no official statement on the increase from @aedcelectricity or @NERCNG.

“These people will not stop robbing us,” according to one Twitter user.

In response to the tweet, the AEDC explained via its official Twitter handle, @aedcelectricity, that the tariff increase was based on NERC’s order.

“Good day, please be advised that the tariff increase is in accordance with NERC order,” the disco stated.

Also, reacting to the response of AEDC, Ediri asked the power firm to provide the current rates approved by the NERC.

“Kindly make the current rates available as ordered by @NERCNG. Thank you,” the Twitter user stated.

Another Twitter user, Justin David, who reacted to the request by Ediri, then said, “We await their response.”

But the Disco did not make any further comment nor did it reply to the requests of the power consumers.

However, as of Wednesday, no response could be obtained from the power regulator.

Calls and text messages seeking clarification on the development were not immediately returned.

However, according to NERC’s website, one of the commission’s primary functions, as stated in Section 32 (d) of the Electric Power Sector Reform Act of 2005, was to ensure that the prices charged by licensees were fair to customers and sufficient to allow the licensees to finance their activities and obtain a reasonable profit for efficient operations.

“In pursuant to the authority given under Section 76 of the EPSR Act 2005, the commission established a methodology for determining electricity tariff in the Nigerian Electricity Supply Industry and subsequently issued a tariff order called the Multi-Year Tariff Order that sets out tariffs for the generation, transmission and distribution of electricity in Nigeria,” it stated.

It added, “The purpose of the MYTO is to set cost-reflective tariffs which will allow the power sector to be properly funded and functional.

“It provides a 15-year tariff path for the NESI with limited minor reviews each year in the light of changes in a limited number of parameters (such as inflation, interest rates, exchange rates and generation capacity) and major reviews every five years, when all of the inputs are reviewed with the stakeholders.”

Meanwhile, the tariff increase was first observed on the Tariff Band A Non-MD, which was increased from N57.55 per unit in December to N68.2 per unit. This amounts to about 19 percent increase in tariff.

Reacting to the development, the National Secretary, Nigeria Electricity Consumer Advocacy Network, Uket Obonga, confirmed the increase in tariff but stated that it was in line with the MYTO.

He said, “They (Discos) are transiting to the new tariff regime that takes effect from January. On January 1 this year, around 4pm, I had over 300 units in my meter, but to confirm whether there is an increment, I had to buy some units online.

“I bought units of N2,000, which is supposed to be about 26 or 27 units, but what I saw there was about 21 units, which is confirmation that there is a tariff increase according to the current MYTO.

“They moved into a new tariff regime on January 1. But there have been other arbitrary increments outside the MYTO regime. However, the one that took effect now is based on the MYTO, as captured in the MYTO 2020 order.”

Also, NERC Chairman, Sanusi Garba, had during a press briefing said, “We will adjust the rate every six months to take care of the foreign exchange component of costs, and also inflation. This is absolutely a very straightforward thing,”