Senate rejects planned electricity tariff hike, probes N2trn subsidy requirements

Senate has rejected the planned increase in electricity tariff via proposed withdrawal of electricity subsidy by the federal government.

This was even as the Red Chamber mandated its Committee on Power to investigate the over N2trillion subsidy requirements as stated by the Minister of Power, Mr. Adebayo Adelabu to avoid the repeat of fuel subsidy scenario.

It also directed the committee to investigate the statement made by the minister with regards to the N1.3 trillion the ministry was owing GenCos and N1.3 billion owed to gas companies.

Resolutions of the Red Chamber was sequel to the adoption of a motion, titled: “Planned Increase in Electricity Tarriff and Arbitrary Billing of Unmetered Customers by Distribution Companies (DisCos)” by Senator Aminu Abbas (PDP Adamawa Central) and co-sponsored by 10 other senators during plenary on Wednesday.

Rising under Order 42 which deals with urgent public importance, Senator Abbas, said it was worrisome to hear of the plan to increase electricity tariff by the relevant statutory authority.

This, he said was in disregard of increased economic challenges with attendant widespread poverty and high cost of living in Nigeria.

He said the Minister of Power was reported to have said that “The nation must begin to move towards a cost-effective tariff model, as the country was currently indebted with N1.3 trillion naira to Generating Companies, GenCos and 1.3 billion dollars owed gas companies.

According to him, the minister had said that the from over N2trillion needed for subsidy, only N450 billion was budgeted in 2024.

”The Senate may further note that the same electricity businesses are collecting money from customers for services not rendered.

“When they have not added anything to the equipment, they inherited from PHCN.

“Communities buy transformers to replace damaged ones in addition to over burden bills and arbitrary estimates for unmetered customers.

“Cognisance in a country where greater number of the population live below the poverty level, with stagnant wages.

“Rising inflation and depreciating currency, the prospect of higher electricity bill is unattainable,” Senator Abbas stressed.

He said arbitrary energy charges on unmetered customers had become worrisome given February 2024 report of the Nigerian Electricity Regulatory Commission, NERC on non-compliance with energy billing caps by DisCos and penalty of N10.5 billion imposed on DisCos that over-billed its unmetered customers.

The lawmaker said in 2020, the President of Nigeria then, ordered NERC to commence mass pre-paid metering to end estimated billing, saying that funds were released to that effect.

He said it was worrisome that the multiple sanctions declared to be imposed by NERC against DisCos for failing to comply with eradication of estimated billing for unmetered customers which included credit adjustments to over billed unmetered customers for the period January– September 2023.

Senator Abbas said March 2024 billing cycle, publication of the list of credit adjustment beneficiaries in two national dailies,indicates a deduction of N10.5 billion from annual allowed revenues of the eleven DisCos during the next tariff review.

This, he said seemed to have been in futility, given the continued violations by DISCOs.

He expressed reservation that in addition to the high cost of living being experienced in the country, the unmetered customers who are owners of small and medium enterprises are adversely impacted by the level of exorbitant electricity charges and by implication have their businesses affected.

Senate in its further resolutions urged the committee to investigate the role of Ministry of Power, NERC and Ziglaks company on their roles in the failed agreement to provide prepaid meters and ensure Nigeria is not shortchanged.

It also urged the committee to engage the NERC to come up with lasting solution to the energy billing system in the country and other related issues .

The Red Chamber further asked the committee to find out the truth of the matter on issue of Federal Government directive and release of funds for mass pre-paid metering and report findings to the senate.

It also urged the committee to enforce and ensure the judicious utilisation of the N10.5 billion penalty imposed on DISCOs