Government, NERC, Regulation

Praises and Knocks for NERC over Tariff Reduction

Posted: March 19, 2015 at 11:02 pm   /   by   /   comments (0)


The recent tariff reduction by the Nigerian Electricity Regulatory Commission, NERC, has elicited different reactions from different peoples and groups. For some it is a welcome development, while for others, it is all politics and even dis-incentive to doing business. Even the organized private sector is divided on the tariff reduction. For an example the Organised Private Sector (OPS) and civil society organisations (CSOs)  in Edo State on Wednesday described the 50 per cent reduction of electricity tariffs by the federal government as politically motivated, geared towards winning the forthcoming elections.

For members of the Abuja Chamber of Commerce and Industry Limited/GTE, it was commendation for NERC, and the federal government for giving a listening ear to the appeals of the business community and the generality of the consumers of electricity in Nigeria for the reduction in tariff.

The members of the CSO and OPS who spoke in Benin City on Wednesday said the major challenge of electricity consumers besides inadequate power supply was the contentious issue of  N750 monthly fixed charges imposed on consumers by the electricity distribution companies.

Those who spoke included Osazee Edigin of Edo State Civil Society Organisation;Andy Edobor, Chairman of Benin Chamber of Commerce, Industry, Mines and Agriculture (BENCCIMA); Noma Iguisi, Chairman of  National Association of Small Scale Industrialists (NASSI) and Tony Abolo, a media consultant and electricity consumer.

Edigin, who said the reduction of energy charges was not the major pre-occupation of Nigerians, noted that what the masses needed was the total abolition of various fixed charges across the country.

He said the fixed charge of N750 on residential consumers by the Benin Electricity Distribution Company (BEDC) has been a heavy financial burden on the people of the state.

Similarly, Chairman of BENCCIMA, Andy  Edobor, noted that the federal government came up with the 50 percent reduction of tariff on electricity when it was obvious that they will loss the presidential elections.

According to him,  “The federal government action is political and it is now dawned on the government that they will lose the general elections that is why they are now doing everything possible to woo Nigerians.

“For businessmen, it is a welcome development and for the masses, it is of no use without regular power supply as well as if is not extended to the fixed charges.

“Private charges for investors cost between N100,000 to N200,000 and  their electricity consumption monthly is not more than N20,000 and I want to ask, what is the rationale for the exorbitant payment for electricity when they did not consume  up to that amount?”

Reacting also, the state chairman of the National Association of Small Scale Industrialists (NASS), Iguisi said the association was at loss as to what categories of the charges the 50 percent reduction of the electricity tariff affected.

Iguisi added that the national leadership of the body has been discussing with the federal government on the need to reduce the N14 per unit of electricity tariff and scrap the N31 per unit that is also charged.

However,  the Abuja Chamber of Commerce and Industry Limited/GTE has commended NERC, and the federal government for giving a listening ear to the appeals of the business community and the generality of the consumers of electricity in Nigeria to rescind its decision to hike the tariff payable by consumers which was predicated on inappropriate assumption.

In a release signed by the vice-president, Public Relations, Abuja Chamber of Commerce and Industry LTD/GTE, Jude Igwe, the chamber is particularly happy that the commission had realised the negative impact the high tariff would have on consumers and the nations’ economy particularly at this point in time when quite a number of factors, both domestic and global are infringing on the smooth running of the economy.

“We note that the basis for the decision was wrong in ab initio because Distribution Companies (Discos), have a responsibility to collect due revenue from their consumers on the basis of one-on-one contract of pay as you consume and if they fail, for lack of the appropriate logistics or other constraints to effectively collect the revenue, they should go back to the drawing board and work things out. It is therefore unconscionable for the Discos to believe that the only way out for them is to encumber their consumers who pay their bills as at when due with the uncollected bills of recalcitrant consumers.”

It defies all logic that consumers who comply are penalised for the sins of those who do not.

“These amounts not collected which they call collection losses have, by this laudable decision, been removed from customer tariff which has brought it down in some places by about 50 per cent and it is a very big relief particularly for the manufacturing sector.

“The chamber believes that since the Discos are on business and the business community is also on business for the same reason of profit, the Discos should be talking about tariff that would ensure that they recover their costs and ensure efficient operations that will give the consumer value for money.

“We as a chamber are very pleased that the commission has carefully reviewed all the relevant factors and rightly determined that it was
inappropriate to transfer to consumers, collection losses that are
controllable by the Discos,” the statement read in part.

Culled from THISDAY Newspaper

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