Electricity consumers may be heading for a collision course with the Federal Government over its revised electricity tariff christened ‘Service Reflective Tariff’ which took effect yesterday.
The consumers had in the first five months of 2020 paid an estimated N236.5 billion for power consumed, an indication that the figure may rise in subsequent months with the latest tariff hike
But the new tariff regime has abolished the old billing system and introduced another one having new classes of tariff categorisation as approved by the Nigerian Electricity Regulatory Commission (NERC).
Under the old tariff regime, per kilowatt hour(Kwh) for residential consumers under Ikeja Electric was N21.80 but has now risen to N53.87 for same category under the new service reflective tariff and N66.42 per kwh for non -residential or Maximum Demand(MD consumers under Kaduna Electric. The plan, according to NERC was for the sector to gradually make a transition to a full cost-recovery market where cost of services provided will be fully recovered while services are also expected to improve within a very short time in the areas of customer service delivery, infrastructure upgrade, metering and technological solutions based on the level of investments that will be attracted going forward. Customers are now categorised into Maximum Demand customers (MD) and Non-Maximum Demand (Non-MD) customers, in place of the usual Residential, Commercial and Industrial customer classes. Under the new tariff, all customers have now been clustered into different bands depending on the level of service currently being enjoyed.
The new order directed the DisCos to bill customers in accordance to their classifications, adding that Nigerians who receive less than 12-hour supply of electricity will not be affected in the latest hike until service improves. “This order shall take effect from September 1, 2020 and shall cease to have an effect on the issuance of a new minor review order or an extraordinary tariff review order by the Commission,” NERC stated.
“The order reflects the impact of changes in macroeconomic parameters and revenue requirements and a revised tariff design that aligns rates paid by customers with the quality of services as measured by the average availability of power over a month period.
“Pursuant to the objective of incentivising a continuous improvement of service for all customers, there shall be no tariff reviews for customers experiencing an average power supply availability of less than 12 hours per day over a period of one month. “Unmetered customers within service bands A,B and C thus benefiting from a supply availability in excess of an average of 12 hours per day over a period of one month as affected by this tariff order shall be protected by the provision of order on capping of estimated bills in the NESI and federal government intervention on accelerated metering of all customers. “The Commission orders that you shall continue to maintain the lifeline tariff of N4 per kW for all customers consuming less than 50kw per hour of energy per month as a safeguard for the less privileged members of the society,” NERC added.
An Electricity Law expert at the University of Lagos, Prof Yemi Oke, slammed NERC over the introduction of the tariff, saying it was still an abuse of consumer rights and would not ultimately address the their concerns. Oke said cost reflective tariff does not give consumers the choice of flexibility and would in turn subject them to shortchange by the Discos. He said the ultimate solution lies in every consumer being metered to help regulate consumption in a way to suit their lifestyle. He equally faulted the methodology used by NERC in arriving at the current cost per kilowatt hour, saying the tariff is high.