The Senate has asked the Federal Government to, as a matter of urgency, intervene and halt the proposed increase in electricity tariff by the 11 Distribution Companies (Discos) in the country.
The Senate also stressed the need to allow ordinary Nigerians to breathe, insisting that anything that would bring untold hardship to the citizens would be rejected in all its ramifications.
The Upper Chamber has urged the Nigerian Electricity Regulatory Commission (NERC) to decentralize the proposed engagement with Stakeholders scheduled for Abuja to the six geopolitical zones of the Federation for effective participation by all.
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Resolutions of the Senate on Tuesday were sequel to a motion titled, ‘‘Need to Halt the Proposed Increase in Electricity Tariff by Eleven Successor Electricity Distribution Companies (Discos).”
The motion was sponsored by Senator Yunus Abiodun Akintunde, APC, Oyo Central and co-sponsored by Senators Ekpenyong Asuquo, APC, Cross River South and Aminu Iya Abbas, PDP, Adamawa Central.
The Senate also urged the NERC to thoroughly look into the rate review applications filed by the Discos, taking into consideration the interests of citizens, affordability, and the need for improved service delivery;
The Upper Chamber further asked NERC to explore alternative measures to address the financial challenges faced by the Discos, such as improving operational efficiency, reducing technical and commercial losses, and enhancing revenue collection mechanisms.
The Senate has also urged Discos to henceforth discontinue estimated billing and make available to all electricity consumers prepaid meters at affordable prices.
The Senate thereafter mandated the Committee on Power (when constituted) to engage with the Federal Ministry of Power, NERC, and other stakeholders to find lasting solutions to the challenges facing the Nigerian electricity sector, including the need for comprehensive sector reforms.
In his presentation, Senator Akintunde who maintained that the Discos have no justification for the hike especially as the price of natural gas has not been reviewed, however, noted that the proposed increase will significantly impact the affordability of electricity further impoverish the lives of average Nigerians.
Senator Akintunde said that “The Senate: Observes that the eleven (11) successor electricity distribution companies (“Discos”) have filed an application for rate review with the Nigerian Electricity Regulatory Commission (NERC). The request for rate review is premised on the need to incorporate changes in macroeconomic parameters and other factors affecting the quality of service, operations and sustainability of the companies;
“Also observes that the Commission in line with its mandate has requested the general public for comments on the rate review applications by the distribution licensees; while advising interested stakeholders to review and take into consideration the excerpts of the Rate Review Applications filed with the Commission by the respective licensees;
“Aware that as part of the Nigerian Electricity Regulatory Commission (NERC) rule-making process and in the exercise of the powers conferred by the Electricity Act 2023, the Commission is empowered to conduct a Rate Case Hearing on the applications prior to making a ruling;
“Also aware that Nigerian Electricity Regulatory Commission (NERC) had through its official website published and set 20th July, 2023, deadline for comment by stakeholders;
“Worried that within the last within the last 10 years, billions of naira were spent by Senators across Nigeria in the procurement and installation of transformers through various Zonal Intervention Projects (ZLPs) as a result of the request in Senator’s various constituencies.”
According to him, the Senate is “Also worried that when these transformers are supplied and installed it becomes registered properties of the Discos (a privately owned enterprise); while sadly same Discos have consistently refused to energize such Transformers on the ground that affected communities have to pay millions of naira arrears of bills for electricity never consumed while keeping the affected consumer in perpetual darkness;
“Concerned that the services of the 11 discos are currently bedevilled with total failure, occasioned by prolonged blackout due to lack of provision of relevant infrastructure like transformers, electricity poles, poor distribution network compounded with unjustifiable estimated billings, lack of supply of prepaid meters, reap off etc; and
“Also concerned that despite repeated previous increases in the multiyear tariff with assurances of improved service delivery by the Discos no commensurate improvement has been made by any of 11 Discos in their respective service deliveries to justify the previous increment,
“Further concerned that the: proposed increase will significantly impact the affordability of electricity for the average Nigerian, further exacerbating the financial burdens faced by households and businesses;
“Less than one week time frame window provided by Nigerian Electricity Regulatory Commission (NERC) for comments from all relevant stake holders is too small for any meaningful engagement;
“High electricity tariffs will impede industrial growth, job creation, and overall economic development. This will have adverse effects on the nation’s drive towards sustainable development and poverty reduction;
“It is essential to address the issues of inadequate power supply, metering, and quality of service provided by the Discos. Customers should not bear the brunt of inefficiencies in the power sector.”
Recall that in June, NERC said 11 distribution companies (DisCos) had applied for a review of 40 percent increase in electricity tariff from July 1, due to rising petrol prices
Labour unions had kicked against the plan, with the Nigeria Labour Congress (NLC) calling ”it insensitive and callous.”
On its part, the Manufacturers Association of Nigeria (MAN) asked NERC to diversify energy sources, saying a tariff increase would affect the industrial sector and consumers.
The NERC had said it would make known its position on the matter in due time.
