The dust raised by the recent hike in electricity tariff by the Nigerian Electricity Regulatory Commission (NERC) is yet to settle as power consumers, labour some sections of the Organized Private Sector (OPS) and the People’s Democratic Party (PDP) have rejected the planned increase.
NERC had two weeks ago announced electricity tariff adjustments on its website.
Under the new tariff regime, signed by the NERC Chairman, Prof James Momoh, and Secretary, Mr Dafe Akpedeye, the commission said the order superseded the earlier one issued on the subject matter, and “the new tariff regime takes effect from April 1, 2020.”
NERC noted that the order had taken into consideration, other actual changes in relevant macroeconomic variables and available generation capacity as at October 31, 2019.
The commission said the order was in line with updating the Multi Year Tariff Order operating -2015 Tariff Order for 2019 in line with the provisions of the amended MYTO Methodology.
“Projections are made for the variables for year 2020 and beyond based on the best available information.
“The commission, however, based adjustments in the tariff, on the relevant data obtained from the Central Bank of Nigeria and National Bureau of Statistics such as average monthly inflation rate of 11.3 per cent, exchange rate of N309.97.”
According to the NERC publication, for the Abuja Electricity Distribution Company, residential customers R3 that were paying N27.20 per unit are now to pay N47.09.
NERC said the customers are now to pay N19.89 more per unit representing 236.75 per cent increase.
“The commercial customers C3 that paid N27.20 per unit in 2015, when the tariff was last adjusted and implemented are now to pay N47.09 in 2020,” it added.
The commission said for the Ikeja Electricity Distribution Company’s customers, the R3 category that were formerly paying N26.50 per unit is now to pay N36.92 per unit.
The customers are, therefore, to pay additional N10.02 per unit, representing 368.49 per cent increase.
“The commercial customers C3 that paid N24.63 per unit in 2015 are to now pay N38.14 per unit.
“The customers are to pay additional N13.51 per unit representing 282.30 per cent.
“The industrial customers of the IKEDC D3 that paid N25.82 per unit are now to pay N35.85 per unit.
“The difference is now the additional 10.03 per unit, representing an increase of 357.42 percent”.
NERC said that Enugu Electricity Distribution Company residential (R3) customers that were paying N27.11 per unit in 2015 are now to pay N48.12 per unit.
The customers are to pay additional N21.01 per unit, which translates to 229.03 per cent.
The commission directed that “all DISCOs are obligated to settle their market invoices in full as adjusted and netted off by the applicable tariff shortfall.”
But the consumers have described the planned hike as a crime against the citizenry, warning that such move would be resisted.
Reacting to the latest hike, President of Consumer Advocacy Foundation, Mr Adeolu Ogunbanjo, warned that NERC should be ready for a showdown with consumers because the level of service by the DISCOs was appalling and does not in anyway commensurate with service.
He said a lot of consumers were still on estimation billing and without prepaid meters, saying not until all consumers were metered, any hike by NERC would be resisted.
He lamented that the hike would further impoverish consumers as their purchasing power would be further weakened considering the fragile state of the economy.
On his part, Chairman of Magodo GRA Phase 1, Gateway Zone Community Development Association (CDA), Mr Bode Ojomu, expressed dismay at the action of NERC, saying that the general reaction of residents was that of anger and frustration over the development.
He said that services have not improved while the economic strength of Nigerians was dwindling by the day, saying such could not be matched with the increase.
The chairman said that it was wrong for the government to pass the burden of its inefficiency to the citizenry, saying that the DISCOs were only reaping where they did not sow.
He said that estimated billing is on the increase coupled with poor service delivery, obsolete equipment among other shortcomings of the DISCOs.
He lamented that the DISCOs lack the capacity to run the power sector efficiently, saying that their primary motive was that of profit as against effective service delivery.
In separate interviews with Sunday Sun, three consumers recounted their experiences. Ibro in Ayobo, Lagos said: “I do not support attacking electric distribution company staff. The gave us crazy estimated bills, we refused to pay and they cut our light.
“They had thought we would attack their staff that came for the disconnection, but we did not. Rather we engaged a lawyer who petitioned them, to demand for prepaid meters, stop over-estimation and illegal disconnection. We also published it in the newspapers. They have reconnected us and the bills are slightly better than before.”
Another angry consumer said: “Imagine a mini-flat, I mean mini-flat without AC getting a bill of N21,000. Then these agents will insist you pay, if you don’t, they come and disconnect you. That’s enough to make one want to beat the hell out of the fraudsters. The way some of them reason infuriates me.
“You bring bill of N15,000 to someone in a two bedroom flat without AC. You lodge complaint numerous times and nothing is done. I do hustle to pay N8,000 monthly and one vagabond will come from nowhere to tell me to go and pay N40,000 on top or else they will disconnect me. Gosh. I asked the mofo how much his salary was and if he has ever used his hard earned N5,000 for electricity in his life? Even if you work for electricity company, you are also a Nigerian and common sense should tell that paying N15,000 monthly will never happen in a two bedroom flat residence. Those guys need orientation or else their beating never even start.”
For the PDP, the party rejected the proposed hike in its entirety. The PDP in a statement by its National Publicity Secretary, Kola Ologbondiyan, said that the increase is draconian and against the interest of Nigerians.
Consequently, the party charged the Federal Government to immediately rescind the increase, which it described as “obnoxious and provocative”, and consult further with the citizens on the issue.
It expressed dismay that the government wanted to increase electricity tariff, at a time Nigerians are still grappling with the increase in Value Added Tax ( VAT) from five per cent to 7.5 per cent by the All Progressives Congress (APC)-led administration.
The PDP implored the National Assembly to come to the aid of Nigerians by deploying its statutory legislative instruments to call the Federal Government to order in the interest of the country..
According to the party, the “increase in electricity tariff as a furtherance of the fleecing of Nigerians, who are already overburdened and groaning under the weight of high costs, economic repression and heavy taxes foisted by the insensitive APC administration.
“It is lamentable that Nigerians, who are already suffering the devastating negative impact of the recent increase in the Value Added Tax (VAT) from five per cent to 7.5 by the APC administration, are now being further suppressed with increased electricity tariff.
“Our party holds that the increase in electricity tariff, under the prevailing harsh economic conditions, is injurious to the wellbeing of Nigerians as it will further stress the productive sector and lead to an upsurge in the cost of regular and essential goods and services, including food, medicine, housing, education and other critical needs.
“This APC policy, if allowed, will worsen the suffering of Nigerians as it will put more stress on already overburdened families, cripple businesses, result in job losses and exacerbate the prevailing frightening unemployment rate under the Buhari administration.
“The PDP invites Nigerians to note that this toxic and distasteful ‘New Year gift’ by the APC administration, at a time Nigerians are coming back from Yuletide festivities, shows that the APC is indeed unfeeling, insensitive and have no iota of regard for the sensibilities and wellbeing of our citizens.
“The PDP insists that any administration that has the interest of the people at heart should provide alternatives or hold consultations with the people before imposing such harsh tariff on its citizenry.”
But, while the consumers are at daggers drawn with NERC, members of the House of Representatives quickly intervened, directing the suspension of the planned hike.
The House of Representatives asked the Federal Government, through the Ministry of Power, to suspend the planned upward review of electricity tariff until the National Assembly lifts the embargo.
The House Committee on Power, which met with the ministry, the Nigerian Electricity Regulatory Commission and distribution companies in Abuja last Tuesday, asked that the policy, scheduled for implementation from April 1, 2019, remained on hold until the Speaker, Femi Gbajabiamila, concludes his talks with stakeholders.
The Speaker had, last Saturday, via his verified personal Twitter handle, stated that the Discos had yet to convince Nigerians that estimated billing would be stopped if they increase the consumption tariff.
He had also said the National Assembly should ensure that the proposed new electricity tariffs were cost-reflective, while stating that the increment should not be allowed until estimated billing, popularly referred to as ‘crazy bill’ was criminalised.
The Speaker had also disclosed his resolve to meet with the Minister of Justice and Attorney-General of the Federation, Abubakar Malami (SAN), and other stakeholders in the power sector on the matter.
The Minority Leader, Mr Ndudi Elumelu, had on Thursday condemned the plan, asking the NERC, which regulates the power sector, to stop all processes leading to the increment.
But the Chairman of the House Committee on Power, Mr Magaji Aliyu, after the members grilled the government officials for about one hour, said Nigerians would not accept the new tariffs until estimated billing by the DISCOs, popularly called ‘crazy bill’, had been prohibited.
The lawmaker said he received about 50 petitions by electricity users against the government and the private operators.
Aliyu said: “There are so many unresolved questions. I pity the DISCOs, there are locations that they cannot even go to collect the tariffs, and they have a lot of debt.
“On behalf of this committee, I will liaise with the Senate Committee (on Power); I want to ask you to put this on hold until proper consultation is achieved. We want to have a smooth sailing.
“We have seen what happened in the communications sector, everybody is paying, nobody is complaining. We see what is happening in the petroleum sector, some are selling (Premium Motor Spirit or petrol) at N145 per litre, and some are selling as low as N143, N142 per litre. But we are not going to allow you to charge different tariffs for different zones. It has to be uniform because the poor Nigerian in my village (in Jigawa) is the same poor Nigerian that is paying for power in Nnewi or Ado Ekiti. People will not understand, you have to do a lot of media work for people to understand what you mean.”
But a don in electricity law, University of Lagos, Dr Yemi Oke, said it was wrong for the House of Reps to interfere in the affairs of the power sector since it was a privatised entity.
He said that NERC as a regulator should be an independent body, but noted that the consistent interference in the activities of the agency show that the power sector was not truly privatised.
While condemning the timing of the increase, Oke flayed NERC for planning a tariff adjustment at a time consumers across the country are yet to be metered alongside poor level of service delivery.
The don said the law permits tariff adjustment, which could either be upward or downward, lamenting that in Nigeria, whatever goes up never comes down.
He warned that tariff adjustment is not the solution to the challenges confronting the power sector, warning that, if such continues it would get to a time that the cost of generating alternative power supply using petrol and diesel would be at par with electricity tariff.
He said that NERC has failed to apply tariff methodology in arriving at its series of adjustment, a development which he said was not in line with global best practices.
Ahead of the reforms, Oke stated: “The ongoing power sector reform had a huge potential to stimulate national growth and economic development in Nigeria. The role of energy as a catalyst for development is undeniable, but a dangerous precedent capable of undermining sustainable electricity, particularly consumers had been inadvertently laid down in Amadi versus Essien.”
Oke had stated that several years after the case, the precedent is yet to be reversed apparently because Nigerians have lost confidence in the institutional frameworks of electricity sector.
“The case is a reflection of the brutish and unprogressive regime of electricity governance under the defunct National Electric Power Authority (NEPA) and the old Electricity Act. Although the monopoly hitherto enjoyed by the erstwhile NEPA for several decades has been abrogated as the new regime aims to liberalize the sector; the plight of electricity consumers in Nigeria might continue on the negative trends with little or no judicial respite apparently due to the existing case law on consumer protection, which tilts in favour of electricity providers. More worrisome is the fact that the trends might continue under the unfolding regime after the Act,” he said.
He suggested that a clear link must be established between subscribers and consumers of electricity, as lack of definition of the terms under the NEPA regime formed the basis of the decision in the case of Amadi v Essien.
“The case illustrates the point that subscribers of electricity may not be accorded the same right as that of a consumer. The appellate court had held that the notion of a consumer for the purpose of suing NEPA was beyond registered consumers.”
He noted that unlike the NEPA regime, establishment of effective electricity regulatory frameworks and enforcement of such matters as performance standards, consumer rights and obligations and matter connected with or incidental thereto is the central objective of the EPSR Act of 2005.