NES27: Nigerians willing to pay cost-reflective electricity tariff — World Bank

By Obas Esiedesa

Nigeria’s power generation in the past seven days averaged 4,850 megawatts for its over 200 million population with the Federal Government planning to effect a new electricity tariff increase in 2022.

Data released by the Nigeria Electricity System Operator, an autonomous unit of the Transmission Company of Nigeria, covering the period November 14-20, 2021, showed that the highest generation of 5,079MW was recorded on Friday, November 20, 2021.

A seven-day analysis of the generation figures showed that generation was 4,909MW on Sunday, November.

It, however, fell by 1.03 per cent the next day to 4,858MW. It also rose marginally on November 16 by 0.22 per cent to 4,869MWy 1.68 per cent on November 17 to 4,787MW. It again rose by 2.8 per cent on November 18 to 4,921MW.

Also, it rose by 3.21 percent on November 19 to 5,079MW and fell sharply by 10.8 percent on November 20.

While power generation continued to underperform, the lack of willingness by electricity distribution companies (DisCos) to take up all power generated has remained a big clog in the growth of the sector.

Checks by Energy Vanguard on generation load picked by the DisCos showed that as at 1pm yesterday, the 11 utilities supplied 3,535MW across the country.

According to the data, Ikeja DisCo was supplied the highest at 593MW while Eko DisCo followed with 461MW.

Others were Ibadan DisCo 448MW, Abuja DisCo 378MW, Enugu DisCo 321MW, Benin DisCo 296MW, Kaduna DisCo 263MW, Port Harcourt 213MW, Jos DisCo 180MW and Yola DisCo 115MW.

Sector’s fortune in free fall

Despite the Federal Government investing about N2 trillion into the sector since it was privatised eight years ago, a recent World Bank report on the sector stated that major challenges remained.

According to the report: “Nigeria has the largest number of people without access to electricity in the world: every one in ten people without access to electricity now reside in Nigeria.

“Power sector has not been able to keep up with demand or provide reliable supply to existing customers. Only 51 per cent of installed capacity is available for generation.

“An average Nigerian consumes four times less energy than her counterpart in a typical lower middle-income country.

“Businesses in Nigeria lose about $29 billion annually because of unreliable electricity”.

FG plans tariff hikeIn midst of poor performance by the operators, the Federal Government has unveiled new electricity meter price increase with tariff hike set to follow in the new year.

The Nigeria Electricity Regulatory Commission, NERC, in a circular on Meter Asset Programme, MAP, last week raised the price for a single-phase meter to N58,661.69 from N44,896.17 while the cost for three-phase meter was increased to N109,684.36 from N82,855.19.

While the Commission later clarified that consumers had the option of not paying for meters, it disclosed that the Federal Government funded National Mass Metering Programme, NMMP, would provide four million meters to consumers free. 

The government has indicated that tariff would also be adjusted upward in January.

According to Vice President Yemi Osinbajo, most of the subsidies in the sector will be removed. NERC is therefore expected to announce new tariff next month.

Experts view

Speaking on the state of the sector, former Chairman of the Nigeria Electricity Regulatory Commission, NERC, Dr Sam Amadi said the interventions by government remained critical to the success of the sector, he questioned the role played by NERC in the sector.

He said: “We are not hearing about all the monies from the regulator and that is worrisome. It is the regulator who should be speaking about funding for the sector because it has the capacity to regulate expenditure and ensure it goes to what is relevant and prudent”.

Amadi added: “I support the funding for meters but I doubt if it will solve the problem because the DisCos will use the fund to largely replace bad meters and control revenue loss. But the rebate of unmetered customers will remain high and undermine any movement to cost reflective tariff.”

Also speaking, energy lawyer, Madaki Ameh, noted that the continuous interventions could make it impossible for the privatization of the power sector to take off effectively.

“The real issue is that the new owners of the GenCos and DisCos have little or no experience in running the power sector and they have also not invested sufficiently in the sector to warrant being handed the companies to run.

“And because they are aware of the critical nature of power to the Nigerian economy, they are obviously blackmailing the government into providing them subsidies where none is required”.

According to him, licences of the GenCos and DisCos must be reviewed on expiration with a view to bringing in those who have the capacity to effectively manage the sector, which is a cash cow, but is currently performing sub-optimally.

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