In the heat of the power
sector reform in 2010, Nigerians thought their prayers for stable power supply had been heard. Their elation knew no bounds because for a very long time they had been used to a culture of darkness with outrageous bills coming their way like water flowing unabated from a broken cistern. Three years after, the story remains the same. Consumers still pay through their nose while questions are asked without answers.
When the Nigerian Electricity Regulatory Commission (NERC) was established, a new tariff was introduced with effect from June 1, 2012, which was pegged at N500. Prior to that time, Nigerians only paid fixed basic access charge regardless of the power consumed. Today, that fixed charge has been increased to N750, leaving one question on the lips of many – where is the electricity to justify the hike?
Defending the hike at a recent press briefing, NERC chairman, Dr. Sam Amadi, maintained that the new tariff was fair, reasonable and necessary to guarantee continual improvement in electricity supply to Nigerians. He said that power had improved significantly and the new charge was not much, being the lowest in the world.
But the NERC chairman’s argument flies in the face of sound logic. It makes no difference to the masses whose lives have been drastically affected by the increase. Indeed, it runs afoul of NERC’s initial payment plan which recognized different classes of consumers such as the poor, wealthy and corporate organizations. Pre-paid meters, once believed to be the much-awaited solution to power supply hiccups, have not measured up.
In the new tariff plan, consumers will pay higher tariff on two fronts, viz, fixed cost and energy cost, referred to as cost per kilowatt hour. This amounts to double hazard for electricity consumers who have been lamenting under low performance of the power sector.
The annual tariff adjustment would have been reasonable if there was a corresponding stability in power supply before transferring the cost of electricity generation to the consumers. With power generation and distribution still falling short of the projected megawatts annually, any hike in tariff tantamount to putting the cart before the horse. It is unacceptable.
The truth is that consumers would be unmindful of periodic and reasonable hike if they are assured of stable power supply. But to compel such astronomical increase down their throats is to enforce regulations without any visible and corresponding improvement in service delivery.
This review stands condemned as it will negate whatever gains expected to be recorded by the much vaunted reform in the power sector. The multi-year tariff structure as designed by the NERC and tacitly approved by the government deserves review as it only protects the interest of the investors in the sector and has little or no consideration for consumers most of whom are poor and incapable of paying.
Judged from the yearly percentage increase (which covers a fifteen-year period in the first instance), one can predict that less than ten per cent of the current consumers will be able to pay these outrageous tariffs in the next few years.
The consequences of structuring electricity tariffs that are unreasonable and unaffordable have grave implications for the economy and the people. This is a sad commentary on the power reform process, as it speaks volumes about its transparency, viability and ability to deliver in the interest of the nation. A viable power sector is key to revamping and repositioning the economy. Nothing should be done to undermine this objective.
About N3.5 billion is generated annually most of which is alleged to be misappropriated by officials of the company. Amidst all this, the average household pays between N5,000 and N10,000 as electricity bills despite having power supply only for a week or sometimes even two or three days a month.
Undoubtedly, the tariff hike by NERC is another policy by the government to rip off Nigerians who have already been pauperized by the system. A reform process which does not carry along its people or protect their interest has only one direction to go – the abyss.

Arnold Alalibo