Senate asks FG to halt proposed electricity tariff increase

Senate, on Tuesday, called on the federal government to intervene and halt the proposed increase in electricity tariff by the distribution companies, DISCOs.

It also urged the Nigerian Electricity Regulatory Commission, NERC to decentralize the proposed engagement with stakeholders scheduled for Abuja to the six geo-political zones of the federation for effective participation by all.

The Senate’s resolutions were sequel to a motion, titled: “Need to halt the proposed increase in electricity tariff by eleven successor electricity distribution companies, DISCOs” by Senator Yunus Akintunde (APC Oyo Central) and co-sponsored by Senators Ekpenyong Asuquo (PDP Cross River South) and Aminu Abbas (PDP Adamawa Central), during plenary.

Leading debate on the motion, Senator Akintunde, noted that the 11 successor DISCOs have filed an application for rate review with the
NERC, saying that “the request for rate review is premised on the need to incorporate in macro-economic parameters and other factors affecting the quality of service, operations and sustainability of the companies.”

Senator Akintunde informed that the commission, in line with its mandate, requested the general public for comments on the rate review applications by the distribution licenses, while advising interested stakeholders to review and consider the excerpts of the applications filed with the commission by the respective licenses.

The lawmaker further observed that NERC, according to the powers conferred by Electricity Act 2023, is empowered to conduct a rate case hearing on the applications prior to making a ruling, adding that the commission had through its official website published and set July 20, 2023 deadline for comments by stakeholders.

Senator Akintunde expressed concern that “the proposed increase will significantly impact the affordability of electricity for average Nigerian, further exacerbating the financial burdens faced by households and businesses.”

He added that it would impede industrial growth, job creation and economic development while it would also “have adverse effects on the nation’s drive towards sustainable development and poverty reduction.”

According to him, the time frame of less than one week provided by the NERC for comments from all relevant stakeholders was too small for any meaningful engagement.

The lawmaker said “it is essential to address the issues of inadequate power supply, metering and quality of service provided by the DISCOs”, pointing out that “customers should not bear the brunt of inefficiencies in the power sector.”

The Senate, in its further resolutions, urged NERC to explore alternative measures to address the financial challenges faced by DISCOs such as improving operational efficiency, reducing technical and commercial losses, and enhancing revenue collection mechanisms.

It also asked DISCOs to henceforth discontinue estimated billing and make available to all electricity consumers prepaid meters at affordable prices.

The Red Chamber later mandated its 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 electricity sector, including the need for comprehensive reforms.

It added that DISCOs should henceforth liquidate the cost of electricity transformers purchased by communities or individuals before they are added to the billing system.