Two months after the backlash caused by an increase in electricity tarrif, the Federal Government has again increased the tariff payable by power consumers by 50 percent.
The Nigerian Electricity Regulatory Commission (NERC) approved the new increase which is to take effect from January 1, 2021. The new tarrif hike regime is to be paid by customers of the 11 electricity Distribution Companies (DISCOs).
The Commission announced this in a revised Multi Year Tariff Order (MYTO) signed by its new Chairman, Engr. Sanusi Garba on December 30, 2020 and supersedes the previous Order NERC/2028/2020.
In the new Order NERC/225/2020, NERC said its reason for increasing the tariff is because of the 14.9% inflation rate rise in November 2020, foreign exchange of N379.4/$1 as of December 29, 2020. It also owed it to available generation capacity, the United States inflation rate of 1.22 per cent and the Capital Expenditure of the power firms before the tariff was raised.
The revised Service Based Tariff (SBT) also saw increase in the rates payable by all classes of electricity users unlike the one of November 2020, that exempted low power getters. This is effective till June 2021 while a Cost Reflective Tariff (CRT) expected to raise the new cost higher will be activated from June to December 2021, the NERC Order revealed.
Recall NERC earlier in December, 2020, notified that it had begun a review for another tariff, which has been completed and had taken effect from January 1, 2021.
NERC had raised tariff for the DISCOs in September but that drew outrages from customers and the organised labour, prompting the Federal Government to suspend it to pave ways for parties to dialogue.