SUCCESS NWOGU writes 
The current increase in electricity tariff has elicited reactions from stakeholders, SUCCESS NWOGU writes
The increase in electricity tariff by distribution companies (DisCos) across their franchise areas in the country has continued to generate outcry as many stakeholders lament the raise.
The tariff hike was first observed on the Tariff Band A Non-MD, which was increased from N57.55 per unit in December to N68.2 per unit. The Abuja Electricity Distribution Company (AEDC) confirmed the tariff increase, adding that the increment was a directive from the Nigerian Electricity Regulatory Commission (NERC).
It said: “Good day, please be informed that the increase in tariff is in compliance with NERC’s order.” Customers’ outcry A Lagos resident and customer, Tola Adekunle, decried the increment, saying “it is sad that we are having an electricity tariff increment this new year. Is that the new year gift we are supposed to receive? It is more painful that there is no commensurate improvement in electricity services.
How will those customers who still use estimated billing cope? I will not be surprised if the electricity tariff for those who are not using pre-paid meters to be skyrocketed. This is really sad.” Another customer, who resides in Abuja, Alkali Muhammed, said the increment was ungodly considering the economic strangulation that many Nigerians have been plunged into. He called on Discos to ensure that there was commensurate improvement in their services to electricity users.
He said: “I was surprised that the electricity tariff has been increased again. This is not a good development. Many Nigerians are suffering and things are very hard for many people. This is not the right time to increase tariffs. “Since the tariff has been increased, there should be a commensurate improvement in services rendered.”
A Twitter user, Oyibo Ediri, alleged that the Abuja Electricity Distribution Company raised the rate for non-maximum demand customers by N12.65. He said: “AEDC has quietly increased the cost of electricity. Cost increased from N57.55 in December to N68.2 for tariff band A non-MD. No official statement from @aedcelectricity or @NERCNG on the increase. These people won’t stop to fleece us.”
Minister faults report The increment became more curious as the Minister of State for Power, Goddy Jedy-Agba, faulted the report on new tariff imposed on consumers by the NERC. The minister stated this while answering questions from parliamentary correspondents on the presentation of the NUEE Secretary General, Joe Ajaero, on the increase of electricity tariff. Jedy-Agba said: “Where is the Chairman of NERC?
He’s the one that does anything on tariffs. I can’t speak on tariffs. He’s the chairman of NERC that can speak on tariff.” NERC had last year also confirmed adjustments to the electricity tariff regime across 10 electricity distribution companies with increases ranging from 5-12 per cent. The adjustment to the Multi-Year Tariff Order (MYTO) took effect on February 1, 2022, according to the regulations issued by the Commission and posted on its official website.
NERC, while justifying the tariff hike, explained that it was to “ensure that tariffs payable by consumers are commensurate with and aligned with the quality and availability of power supply committed to customer clusters” by the DisCos. It also said that the adjustment would ensure that prices charged by the DisCos “are fair to customers” and are sufficient to allow the DisCos “to follow recover the efficient cost of operation including a reasonable return on the capital invested in the business.”
According to it, the adjustment will also “ensure sustained improvement in reliability of supply in line with the DisCos capital expenditure (CAPEX) proposals and performance in the improvement plan.” Pre-paid meters In an apparent move to address the clamour for pre-paid meters, the Enugu Electricity Distribution Company PLC (EEDC) kicked off its operation for the year 2023 on a positive note as it announced that it had taken mobile MAP metering to its customers in Anambra State, and ensuring that they are able to access prepaid meters within 48 hours.
Head, Corporate Communications, EEDC, Emeka Ezeh, said the exercise allowed customers to pay and get metered and reimbursed with the value of the cost of the meter through energy over a period. He added that it was a conscious way the company has adopted to close the existing metering gap in its network.
According to him, it is designed to be implemented according to Feeders, with 3 different locations selected within the areas covered by the feeder, where metering will be going on simultaneously.
He stated that customers within these areas would be pre-notified of when the exercise will be carried out within their neighbourhood. Ezeh said: “With Ogidi District taking the lead, its Umunya Feeder has been selected for the kick-off on January 10, 2023, and the exercise will be happening simultaneously for 3 days in the following locations: St. Paul Anglican Church, Ogidi, Ochendo Hall, Ogidi and Afor Market Townhall Office, Obosi.
“Customers residing in the listed locations are expected to visit the site along with a valid form of identification (either Drivers License, Voters Card, NIN or International Passport) and a copy of their bills. At the location, EEDC officials will assist customers with the MAP application process, and installation will be made once payment is confirmed. “The Single-phase meter goes for N63,061.27 while the Three-phase meter is N117,910.69. The prices are all inclusive of VAT.
“Customers are therefore encouraged to take advantage of this opportunity and get metered, bearing in mind that they will be reimbursed with the value of the cost of the meter through energy, over a period.” He added that the exercise was being carried out by EEDC in conjunction with its MAPs (Meter Asset Providers) – MOJEC International Limited and Advanced Energy Management Services (AEMS). He explained that MAP was a metering intervention designed and approved by the Nigerian Electricity Regulatory Commission (NERC) to close the existing metering gap in the sector. Concerns have also arisen about whether the tariff increment was to address the reported losses said to have been incurred by the DisCos.
The Nigerian Electricity Regulatory Commission (NERC) in its first quarter 2022 report stated that Discos had commercial losses of 47.88 per cent comprising aggregate technical and commercial loss (23.44%) and collection loss (30.66%). The ATC&C loss increased by +0.97 pp compared to 2021/Q4 (46.91%). All DisCos did not meet their allowed ATC&C loss targets as specified in the MYTO —this means that all DisCos exceeded their efficient loss targets and thereby could not earn the revenue requirement upon which their approved tariffs for the period were set
According to NERC, consistently incurring these inefficient losses could stop the DisCos from meeting their upstream market obligations and so it would adversely affect their long-term financial positions. NERC, in the report, revealed that DisCos averaged a collection efficiency of 67.36 per cent in Q1’22. It added that revenue earned during the period was N199.90 billion, out of N295.69 billion billed to customers.
According to NERC, DisCos achieved a billing efficiency of 77.38 per cent. It said: “The total energy received by all DisCos in 2022/Q1 was 7,300.05GWh while the power bill to the end-use customers was 5,649.21GWh indicating an average billing efficiency of 77.38 per cent.
This billing efficiency is an increment of +1.02 pp from the 76.56 per cent recorded in 2021/Q4. “The total revenue collected by all DisCos in 2022/Q1 was N199.90 billion out of N295.69 billion billed to customers —this corresponds to a collection efficiency of 67.36 per cent, representing a 1.98 pp reduction compared to 2021/Q4 where the average collection efficiency was 69.34 per cent. In monetary terms, although the billing in 2022/Q1 reduced by N7.41 billion (-2.44%), revenue collections reduced at a higher rate – N10.98 billion (-5.22%).” NERC noted that DisCos must employ technology and operational procedures to increase both their billing and collection performances to forestall long-term financial challenges.
It said: “These could include holistic energy accounting procedures, customer and infrastructure metering.” Available generation capacity There were twenty-six (26) gridconnected power stations in 2022/Q1 consisting of 19 gas, four hydro, two steam, and one gas/steam-powered plants. It said: “The plants’ average available generation capacity during the quarter was 4,712.34MW representing a 13.78 per cent decrease (-753.38MW) compared to 5,465.72MW recorded in 2021/Q4” Remittances by DisCos NERC in its First Quarter 2022 Report stated that DisCos had a remittance performance of 65.99% during the period.
It said that DisCos collectively remitted a total sum of N135.69 billion. It explained that N109.96 billion was for Nigerian Bulk Electricity Trading plc (NBET) and N25.73 billion for Market Operators, adding that there was an outstanding balance of N69.94 billion in the first quarter of 2022.
The report said that NBET was expected to receive N164.86 billion under the MRO derived from the allowed tariff as FG is responsible for covering the difference in form of subsidy to energy consumers (N35.27 billion) but only received N109.96 billion for the period. Market remittance According to NERC, the com-bined invoices from NBET (MRO1 adjusted) and MO (market operator) to DisCos in 2022/Q1 was N205.63 billion: It explained that the invoice costs were generation costs – N164.86 billion while transmission and administrative services were N40.77 billion.
It said: “Out of this amount, the Dis- Cos collectively remitted a total sum of N135.69 billion (N109.96 billion for NBET and N25.73 billion for MO) with an outstanding balance of N69.94 billion; this corresponds to a remittance performance of 65.99 per cent during the quarter.”
“Poor remittance is a direct consequence of the DisCos recording higher than allowed ATC&C performance as established above.” Remittance to NBET The report stated that Discos had a remittance performance to NBET of 66.70 per cent for the period. It said: “Out of the total invoice of N203.13 billion issued by NBET to Dis- Cos for energy generation costs, it was expected to receive N164.86 billion under the MRO derived from the allowed tariff; this means the government is responsible for covering the difference in form of subsidy to energy consumers (N35.27 billion).
“However, NBET received only N109.96 billion during the quarter. Overall, the total DisCo remittance performance to NBET was 66.70 per cent of the expected MRO for 2022/Q1 compared to 68.34 per cent (N109.45 billion remitted against an MRT adjusted invoice of N160.13 billion) in 2021/Q4.” Remittance to MO According to the report, the total invoice from market operators to DisCos in 2022/Q1 for which a 100 per cent remittance is expected was N40.77 billion.
It said: “However, only N25.73 billion was received across all the DisCos, meaning that the remittance performance to MO for the quarter was 63.12 per cent. “This represents a 15.47 pp decrease compared to 78.59 per cent (N39.75 billion remitted against an invoice of N50.58 billion) recorded in 2021/Q4. “Odukpani-CEET received an invoice of $3.42 million from MO during the period but no payment was made by this customer.”
NERC’s caution NERC cautioned that the non-settlement of market obligations by this category of market participants should push MO(Operators) and NBET to activate relevant safeguards for remittance shortfalls
