DisCos gives conditions to stop electricity tariff increase

Electricity tariffs increase inevitable, DisCos tell NERC

Increase in electricity tariffs will become inevitable should the Nigerian Bulk Electricity Trading Company Plc (NBET) be allowed to raise its price by 30 per cent, Electricity Distribution Companies (DisCos) have told the Nigerian Electricity Regulatory Commission (NERC).

NBET handles the management of existing power purchase agreements (PPA) and new procurement of power in the electricity chain.

The planned increase tariff in price was a major issue at a four-day stakeholders meeting involving NERC, top management teams of the 11 DisCos, NBET, Electricity Generation Companies (GenCos) and Transmission Company of Nigeria (TCN),  which ended in Lagos on Thursday.

The NBET’s proposition was based on the floating of the naira.

Before the unification of foreign exchange markets, NBET sold power to DisCos based on N446/$ in the then official rate controlled by the Central Bank of Nigeria (CBN).  The naira is currently exchanging around N770 to one dollar.

The Nation quotes sources as saying that the DisCos had informed NERC that if NBET implements the 30 per cent increase, would not be able to sustain their businesses unless there is increased tariffs. “The DisCos are insisting that the 30 percent proposed increase by NBET is too much. At this rate, paying NBET for the power sold to us will be very challenging. If we get it (Power) from NBET at 30 percent increase, then how much do we sell to the consumer, and how do we pay NBET?”

Although, the meeting ended yesterday, the NERC did not release any statement on the outcome.