Stable Electricity Supply: NERC To Carry Out Tariff Review At Six-Month Interval

The Nigerian Electricity Regulatory Commission (NERC) says it will conduct a minor tariff review every six months to reflect the economic situation in the country.
This, it stated, is due to the disparity between the local currency (naira) and other major international currencies, especially the United States dollar.
NERC Chairman, Sanusi Garba,  explained that the minor tariff review approved for the Distribution Companies (DisCos) was in line with the tariff methodology adopted by NERC for periodic adjustments of tariffs based on inflation, exchange rates and gas pricing.
“We will adjust the rate every six months to take care of the foreign exchange component of costs, and also inflation.This is absolutely a very straight-forward thing,” Garba said.
Debunking the insinuation that the Commission was implementing tariff review in secrecy, Garba added a caveat that while the review “might not necessarily be an upward review,” the country’s foreign exchange rate has maintained an upward path as the naira is being devalued. Inflation, he said, has also remained on the high side.
The implication of this, experts explained, is that should these economic indexes continue to rise, the electricity tariff review would have to follow a similar trend and vice-versa.
Garba noted that the prevailing situation, especially pipelines vandalism, has been affecting gas supply to power plants, adding that the development remained a major reason for the worsening state of electricity in the country.
He said discussions are on to bring new gas plants on the grid to address the shortfall currently being witnessed in the grid.
The commission blamed the loss of about 400 megawatts and challenges on some networks for the double collapse of the grid recently.
According to Garba, stakeholders, including the Nigerian National Petroleum Company Limited, are working hard to resolve prevailing challenges.
The NERC boss said DisCos are being forced to pay back to consumers where they have been billed illegally, adding that the company will do everything possible to protect the interest of consumers.
NERC, he explained, ensured that Jos DisCo refunded N200 million to consumers for poor service, adding that capping of estimated bills is also to protect consumers against arbitrary charges.
Admitting that the generation firms are being owed legacy debts, he noted that the government is clearing other debts.
Garba said the issue of shortage of gas supply to power plants, collapse of the national grid, illiquidity of the industry, huge metering gap and infrastructure deficit were some of the challenges confronting the sector.
He said the plan of the government was to ensure that the thermal power plants were working optimally and to ensure that there was stability in the grid.
NERC, he continued, had approved a special gas pricing for emergency contracting of gas from the Nigerian Gas Marketing Company Limited for the Niger Delta Power Holding Company (NPDHC), to optimise utilisation of its power plants.
According to him, it is expected that about 800MW will be generated from the NDPHC plants.
He said the gas pipeline affected by acts of vandalism had been restored and the Okpai Power Plant had resumed power generation and  contributing an average of 300MW. He added that the “pegging” of the gas pipeline supplying gas to the Odukpani Power Plant had been scheduled for completion thus ramping up generation by about 400MW.