Amid poor electricity supply, NERC gives fresh tariff increase notice

The Nigerian Electricity Regulatory Commission is not backing down on its resolve for an upward review of electricity tariff even as poor supply persists.

The commission gave a notice of minor review of the Multi Year Tariff Order (MYTO) in a statement on Wednesday titled, “Notice of Compliance in Respect of the Biannual Review of the Revenue Requirements of Licensees”.

The new notice is coming two weeks after NERC unveiled the new rates for electricity tariff which it effected on February 1, 2022.

Latest supply showed  20 power plants as of Wednesday were generating 3,378 Megawatts despite the fact that the tariff increase was predicated on improved supply.

NERC in the notice signed by its Chairman, Sanusi Garba, posted on its official website explained that the review will not necessarily lead to tariff increase.

It stated, “Pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA), the Nigerian Electricity Regulatory Commission adopted the Multi- Year Tariff Order (MYTO) Methodology in setting out the basis and procedures for determination of licensees revenue requirements and review of electricity tariffs in Nigeria.

The methodology provides for Minor Reviews (every 6 months), Major Reviews (every 5 years) and Extraordinary Reviews in instances where industry parameters have changed significantly from those used in the operating tariffs to such an extent that a review is required urgently to maintain the viability of the electricity industry.

“We wish to clarify that such reviews do not automatically translate to an increase in tariffs. Indeed where the impact of improved efficiency in operating parameters for individual licensees exceeds the impact of changes in macroeconomic parameters, end-user tariff may be reduced as exhibited in some tariff classes under MYTO 2022.

“In compliance with EPSRA and other relevant industry rules, this notice is issued to inform the general public and industry stakeholders of the Commission’s intention to commence the processes for the July 2022 Minor Review of MYTO 2022 to consider changes in relevant macroeconomic indices, generation capacity and CAPEX required for evacuation and distribution of the available generation capacity in compliance with extant rules.”