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NERC Could Revise Electricity Tariff Amid Calls For Fairness, Due Process

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6 months ago

Jun 11, 2024.

Hon. Victor Nwokolo, Chairman of the House Committee on Power, emphasized that electricity tariff increases must be fair and just.
Minister of Power, Adebayo Adelabu, stated that higher tariffs under band A reduced the electricity subsidy from N3 trillion to N1 trillion.
Nwokolo stressed that the Nigerian Electricity Regulatory Commission (NERC) must follow regulatory due process when approving tariffs.

EKO HOT BLOG reports that the chairman of the House of Representatives Committee on Power, Hon. Victor Nwokolo, emphasized on Tuesday, June 11, that any increase in electricity tariffs must be fair and just.

He made this statement during a public hearing conducted by the Joint Committees on Power, Commerce, National Planning and Economic Development, and Delegated Legislation on the topic of electricity tariff increases.

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During the hearing, the Minister of Power, Adebayo Adelabu, noted that the introduction of band A with a higher tariff had significantly reduced the electricity subsidy from N3 trillion to N1 trillion. According to Adelabu, without the tariff increase, the expected subsidy would be nearly N3 trillion, a cost the federal government could not sustain. He also pointed out that Nigeria’s electricity tariffs remain lower compared to neighboring countries.

Chairman Nwokolo stated that although the legislature has granted the Nigerian Electricity Regulatory Commission (NERC) the authority to approve tariffs, this power can only be validly exercised when the regulator adheres to proper regulatory due process.

“The power of a regulator to approve tariff increase has to be justified by evidence and logic that show that the reviewed tariff is fair and just and apportioned to different customer class according to the real costs of serving them.

Electricity Tariff

“The Electricity Act authorises NERC to allow an operator to recover the costs of electricity supply. But this recovery will be only after the operator has established that it has incurred the costs in a prudent manner. The regulator cannot impose a burden on customers to bear imprudent and unnecessary costs.

“We want everyone here today to assist us with the truth. We want to know the challenges the sector is facing and how we can support. We want to see how responsible each of you has discharged your responsibility under the law and the terms and conditions of your licenses.

“We want to know how customers have been served and protected. We want to know whether the safeguards that the legislature wrote into the law was complied with in the recent approval of tariff review. We want to be able to tell the entire house that the regulator and the minister followed the law and global regulatory practice in approving the tariff review,” Nwokolo said.

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