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Investigations have revealed that the Electricity tariffs have actually not been halved as was reported two days ago.
According to a Source at the Nigerian Electricity Regulatory Commission(NERC) That the Federal Government has slashed 50% off in electricity tariff is not true.
Newspapers and several online media that carried this report a few days ago totally got it all wrong.
This claim was based on a directive issued by the National Electricity Regulatory Commission, NERC. Here.
Some Nigerians have since started issuing series of statements to counter the information being spread out to the public. “FGN didn’t slash any electricity tariff! 50% of what the electricity companies have been stealing from us was returned to us by the regulating commission. So don’t let anybody lie to you that FGN slashed electricity tariff to gain cheap political points! Let NERC ordered the removal of the monthly maintenance fee. That makes lots of sense to me. What are they maintaining, darkness?”
But out of all those who voiced out their opinion over the 50% reduction, Sola Salako didn’t take it so easy on the electric company as she hit her facebook timeline to lash out the Federal Government and the people behind the purported electricity tariff reduction.
“My dearest Nigerian Electricity Consumer, I hate to burst your bubble but it looks like you have been conned…again! Apparently, contrary to the breaking news, your electricity bill may not be reduced by 50%…at least not out of the President’s sudden concern for your plight in that sector”
What Investigations also revealed is that the NERC release made no reference to how much the new tariff was after its was supposedly cut.
To understand how NERCs report was twisted to mean a 50% Tariff reduction, one will have to look at the press released issued by NERC. Of particular reference is the paragraph that mentioned “50%”.
The Commission has been listening to consumers and taking full account off the impact of high tariff on consumers and the Nigerian economy, has therefore reviewed the basis of the MYTO 2.1 assumptions and has determined that it is inappropriate to transfer to consumers collection losses that are controllable by DISCOs. It is the responsibility of the DISCOs to collect their revenue from their customers. Failure to do so should not be a penalty to customers who pay their bills. It is clear that removing the collection losses will lead to lower tariffs for consumers. The removal of collection losses from customer tariff has reduced tariff by more than 50 percent in some places. Please note that the reduction does not affect the CBN facility and its repayment.
From the highlighted section, it is clear that the commission basically gave an example of how removal of collection losses can reduce tariff by more than 50% “in some places”. This is by no means a confirmation that electricity has suddenly been reduced to 50%.
What the NERC DG was trying to say (which he failed to explain) was that assumption for calculating Aggregate Technical, Commercial and Collection losses ( ATC&C losses) is over blown by some Discos. ATC&C losses are basically targets that Discos are allowed to include in their assumptions when computing tariffs. They arise because electricity is a product that does not have storage ability unlike most inventories (like cars, books etc.), and as such when generated some of the energy gets lost through evacuation from the ‘Gencos’ to transmission by the ‘Transico’ and then some through distribution lines (wires and transformers) by the discos. They also must be consumed when generated unlike cars which you can keep and use whenever you wish.
Whilst ATC&C losses are understandable and allowed, the ones that are due to a discos inefficiencies should not allowed to be passed on to consumers. The higher the ATC&C losses allowed to Discos the more it leaves room for manipulation by some inefficient discos making them load those losses via tariffs which customers end up paying .
This is basically why NERC said some removal of collection losses (a subset of ATC&C losses which refers to discos inability to collect billed revenues) reduces tariffs by 50% in some cases. It doesn’t mean tariffs will be unilaterally reduced by 50%!!!
Many have said the Ruling Party PDP rushed to the press with this misinformation to garner political points, however, the NERC is to blame, they released a press statement announcing some reduction without releasing figures as to how much the new tariffs would now be. That way, each customer would know how much their new bill would be.
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