Electricity tariff increase looms as NERC plans another review
Electricity tariff increase looms as the Nigerian Electricity Regulatory Commission (NERC) has announced its plan to review the tariff process for the 11 Distribution Companies (DisCos) and revise the approved capital expenditure for the power distributors in July.
NERC made the disclosure in a release tagged “Notice of Minor and Extraordinary Review of Tariffs for Electricity Transmission Distribution Companies” posted on its website yesterday.
According to the regulator, the review was pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA) which adopted the Multi-Year Tariff Order (MYTO) in setting out the methodology and procedures for reviewing electricity tariffs in Nigeria.
The commission said it would also commence the processes for the July 2021 Minor Review of the Multi-Year Tariff Order (MYTO-2020), which is done every six months.
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The electricity commission explained that extraordinary tariff reviews are carried out in instances where industry parameters have changed from those used in the operating tariffs stating that the review was as a result of changes in inflation, foreign exchange, gas prices and available generation capacity.
It would also consider Capital Expenditure (CAPEX) required to evacuate and distribute the said available generation capacity in accordance with the EPSRA and other extant industry rules.
The notice said the evaluation of the DisCos’ requests for review of the CAPEX proposed in their Performance Improvement Plans (PIPs) could not be concluded during the Minor Reviews undertaken in 2020.
It added that Section 21 of the MYTO – 2020 Order provides for consideration of DisCos’ CAPEX application upon further scrutiny and evaluation of the investment proposals.
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Further to the above, the commission stated that it held a series of public hearings and consulted stakeholders in the first quarter of 2020 on the extraordinary tariff review applications of the 11 electricity Discos to consider their respective five year Performance Improvement Plans (PIPs).
It however invites stakeholders and the general public to send their comments to the commission within 21 days from the date of this publication