NERC Explains Rise In Electricity Cost

The Nigerian Electricity Regulatory Commission (NERC) has said that the recent adjustment in the average cost of electricity from N8.50 to N10 from July 1, 2011, is part of the Multi-Year Tariff Order (MYTO) that came into effect in 2008, and should not be viewed as price review.

Making the clarification in a statement yesterday in Abuja, chairman of the commission, Dr. Sam Amadi, said: “Let it be clear to all consumers that NERC has not reviewed the existing tariff regime of Multi Year Tariff Order (MYTO); the slight adjustment of the average cost of electricity from N8.50 to N10 from July 1, 2011, is part of MYTO that came into effect in 2008.

“It is routine in keeping with the provisions? of Sections 76 of the Electric Power Sector Reform Act 2005 that electricity tariff has auto-adjusted to reflect current cost of gas and general inflation. This routine adjustment should not be misconstrued as price review by the commission,” he explained.

Speaking further Amadi said that the agency was consulting with stakeholders, including sector experts, academia, organised labour as well as civil society organisations, and welcomed? contributions from the generality of Nigerians on how to move the sector forward.” ?

He noted that the commission recognised the concerns expressed by the public about raising prices when power supply was still poor, and that to address this concern, NERC had extracted undertakings from the utilities to drastically improve services from generation to distribution to justify the recent adjustment in tariff.

“We are not solely relying on these undertakings; we are deploying rigorous reporting and accountability frameworks to monitor clear improvements in specific areas, especially with regards to improving distribution networks and customer services,” he added.

The NERC boss explained that the National Integrated Power Projects (NIPP) would be brought under the auspices of the Niger Delta Power Holding Company (NDPHC) and under strict regulatory control to ensure scheduled delivery of its projects, with a view to ensure increased power generation.

Amadi further disclosed that the commission had completed regulations on distributed generation to help solve critical shortage by allowing generators to serve host communities, and for state governments who have invested in generation capacity to reap the benefits of increased electricity supply in their states.