New Electricity Tariff Takes Effect From July 1

The new electricity tariff will take effect from July 1, as part of measures aimed at improving its performance level in power supply within its jurisdiction, according to the Abuja Electricity Distribution Company (AEDC).

The Managing Director of the company, Ernest Mupwaya, said in a statement in Abuja said that the review which was overdue even before the outbreak of COVID 19, became necessary in view of radical changes in the macro-economic indicators such as inflation and foreign exchange.

Mupwaya explained that the new tariff is a total departure from the blanket and across board tariff structure used in the past in the sector.

The tariff, he said, was predicated on the level of service available to customers in different clusters, especially in terms of hours of availability of electricity supply to specific geography within its franchise area.

There are five tariff bands under the new regime of tariffs: Bands A to E.

In Band A are customers who have to 20 hours of supply and above while Band B comprises customers who enjoy electricity supply for at least 16 hours but do so for less than 20 hours daily.

Bands C and D are customers who enjoy electricity supply for a minimum of 12 hours but not up to 16 hours and a minimum of 8 hours but not up to 12 hours respectively.

In Band E are customers who receive electricity for less than eight hours.

Mupwaya further said that customers within Bands A to D will experience a marginal upward adjustment in the cost of electricity,

He said that those in Band E will have their tariff frozen until the company could show an improvement in the level of service to the customers within the cluster.

“We have structured the new tariff regime in such a way that there can be fairness and equity both to the service provider and the customer.

“Embedded in the new tariff regime is an incentive for the service provider to speedily ramp up performance to 24 hours in all clusters

“So that it can draw from the benefit of economics of scale associated with numbers, volume and other parameters within its geography,” he said.

The managing director listed some of its achievements to include the sector leader in the metering of customers, installation of hi-tech technical equipment, and a robust commercial management system, as well as a multi-channel customer contact centre.

He said that the company was prepared more than ever before to further raise the bar of performance in the sector.

Mupwaya also said that the Nigerian power sector had no doubt arrived at a critical juncture as it heads for the point where it could serve as a catalyst for industrial and socio-economic growth and development of the nation.

He noted that the role of customers was a critical element in the transformation journey which comes in the form of accurate and consistent payment for energy received.

The managing director said that the electricity value chain – gas companies, generation company, Transmission Company of Nigeria (TCN) and distribution companies could only improve where investment and recovery were at par.

“And the investor has the opportunity for a marginal compensation for his investment,” he said.