May 3, 2021

NERC approves new tariff review applications, Capex for DISCOs


By Chris Ochayi – Abuja

The Nigeria Electricity Regulatory Commission, NERC, has approved new Extraordinary Tariff Review applications, Performance Improvement Plan, PIP, and Capital Expenditure, CAPEX, for electricity Distribution Companies, DIcOs effective from July 1st, 2021 till 30th June 2026.

This was contrary to the earlier position of the  Minister of Power, Engr. Sale Mamman, who at the weekend allayed consumers’ fear there will be no significant tariff increase.

However the NERC orders issued Sunday to the different DISCOs, were about applications for extraordinary tariff review, Performance Improvement Plans, and capital expenditure for the next five years, beginning from 1st July this year.

For Ikeja Electricity Distribution Plc, IKEDC, the NERC said: “This regulatory instrument may be cited as NERC Order on PIP and Extraordinary Tariff Review Application for Ikeja Electricity Distribution Plc (IKEDC)”.

The NERC document said, IKEDC just like the other DISCOs, applied for the Commission in November 2019 for a review of the provisions for CAPEX in its Multi-Year Tariff Order, MYTO, tariffs to support the implementation of its PIP over the next five years.

READ ALSO: Interrogating the NNPC/Addax face-off over oil mining leases [opinion]

The order noted, “Under the Power Sector Recovery Program, PSRP, it is envisaged that the commission would implement a robust tariff review process aiming at improving performance in the Nigerian Electricity Supply Industry, NESI.

“This process involved a review of CAPEX allowances in MYTO model compliance with PIPs of the DISCOs.

“The approved PIP and Extraordinary Tariff Application shall form the basis for IKEDC to prioritise the implementation of the proposed CAPEX initiatives.

“The approved PIPs shall also form the basis for defining Key Performance Index for IKEDC for the next five years by the Commission with an emphasis on improvement in energy throughout and improving service delivery to customers”.

IKEDC proposed to undertake numerous interventions to improve service delivery to customers.

Over the next five years, the proposed interventions will allow the company to increase the total energy supplied across IKEDC from the 2019 levels of 4,469Gwh/year to 5,263GWh/year by December 2022.

The energy distributor planned to increase the average duration of supply to customers in each tariff band over the same period. It said it shall increase platinum cluster from an average of 17 hours per day to a minimum of 20 hours per day.

The IKEDC also planned to reduce the average duration of interruptions from 12 hours to 8 hours per month by December 2022.

For the Abuja Electricity Distribution Company, AEDC, the company proposed to undertake numerous interventions to improve service delivery to the customers.

Over the next five years, the proposed interventions will allow AEDC to achieve substantial improvement in service delivery but not limited to the following:

“Reduce ATC & C losses from the current level of 45 per cent to 19 per cent over 5 years

“Achieve 100 per cent metering of customers by installing 698,606 meters over 3years + Improve customer safety and reduce inadvertent accidents

“Increase number of new customers from the current level of 1,214,259 to 3,450,695 over 5 years”.

Vanguard News Nigeria