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New electricity tariff regime starts in July, FG insists

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By Olugbenga Salami

Federal government has insisted on July this year for the commencement of new increment on electricity tariff in the country.

Minister of Power, Engr. Saleh Mamman, made the declaration yesterday at the investigative public hearing on “Power Sector Recovery Plan and the Impact on COVID-19 Pandemic”, organised by the Senate Committee on Power in Abuja.

Mamman lamented the impact of the COVID-19 pandemic which he said had also affected the laid out plan for the repositioning of the electricity market towards financial sustainability under the Power Sector Recovery Programme.

According to him, the regulator, following the completion of public consultation on tariff review, had initially planned to conduct a tariff review in April 2020.

However, he said due to the COVID-19 outbreak and customer apathy, the proposed tariff review was delayed by three months.

He said: “The impact of this means the subsidy being incurred in maintaining the current tariff level had to be maintained till July 2020 when the proposed tariff review will be implemented.

“The challenge we are currently facing in the development and expansion of our transmission line is budget and release of Federal Government’s commitment in the estimated sum of N32bn primarily for Right of Way acquisition and environmental impact mitigation.

“The fund should be provided for in the 2020, 2021, and 2022 Appropriation of the Ministry of Power.’

Mamman also said that the COVID-19 pandemic, has had a great economic impact – not just on the health Sector, but the overall economy of the country.

“Indeed, the prevalence of the pandemic has already reduced productivity due to the strategy adopted globally to contain it.

“This by default affects the purchasing power of consumers and the demand for electricity in general.

“The current situation in the Nigerian power sector is that a lot of capital investment is being made, most of which is dependent on donor funding, loans and budgetary allocation.

“For projects that we have already secured their funding, we do not expect any adverse effect”, he said.

He, however, said his ministry was proactively seeking strategies to identify projects that would require counterpart funding in the face of dwindling national revenue
so as to deliver within the projected timelines.

“This explains our prayer for the Distinguished Senators to consider and approve additional funding for the execution of the various projects we are undertaking, he said.

The minister added that the power sector was also grappling with the challenge of infrastructural misalignment, market inefficiency/transparency, sector governance/policy coordination, increase energy access and completion of legacy projects.

“We believe solving two challenges alone, would not only redress these challenges, but will also unlock the Sector for investment, efficiency and service delivery, bringing affordable and stable power to the nation.

“It is thus fortuitous that President Muhammadu Buhari has championed the Siemens Electrification Plan under the Presidential Power Initiative, as the central theme of the government’s strategy in the sector.

“I believe that all efforts rendered by the many relevant stakeholders within the stakeholders should be aligned with the PPI for maximum
effectiveness in implementation.

“It is really our only choice to once and for all resolve the longstanding issue of the Power Sector”, he added.

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