FG still subsidising electricity tariff, says NERC

The Federal Government is still subsiding electricity tariff being paid by cosumers, Nigerian Electricity Regulatory Commission has said.

Chairman of the commission, Sanusi Garba, stated this despite the complaints by consumers about high tariif.

He spoke on Monday during a session with the House of Representatives committee on finance on the 2023-2025 medium-term expenditure frame and fiscal strategy paper (MTEF/FSP).

Garba however did not give details of the subsidy, adding that the revenue would go up in the nect three years to reduce the tariff burden.

He said, “In 2024, revenues should go up slightly to N23.5 billion and the operating surplus would go down to N1.1 billion and the reason is simply that we are motivated as much as we can to reduce the tariff burden of consumers because of affordability issues.”

“In 2025, revenues go up to N24.7 and the operating surplus goes up to N1.4 billion. I repeat the surpluses are going down because we want to reduce the tariff burden of consumers. Right now, the Federal Government is subsidising the tariff to some extent. In the last few years, subsidies were in the region of N5 billion. So, we don’t want to contribute additional burden and that’s why the surpluses are declining as we go forward.”

For 2020, Garba said the auditor’s report revealed that the commission’s operating surplus was N3.8 billion and that reconciliation was ongoing with the office of the accountant-general of the federation, after which remittances would be made.

Garba also disclosed that NERC would be investing heavily in technology for enhanced service delivery to consumers, adding that the commission planned to spend N2.5bn on computers including software next year.

He in utility regulation, information technology is very important as it is not proper to rely on information given by licensees alone.

“So we are investing heavily in technology so we have credible information about quality of service. Without technology, we cannot know that a feeder in an area is out for 48 hours and people are in darkness,” he said.

He also said, “So, over the next few years, we will be investing heavily on technology for data aggregation.

“In 2021, the budget for computers, not just hardware but the software that drives the machine is N1.5 billion. And we are spending N2.5 billion in 2023 and N1 billion in 2025 and we will do this.”

Garba added that NERC “would want to be in a position to see what is happening in all the feeders directly from the commission, not relying on the Disco telling you we supplied this and that in so, so location; So, investing N5 billion on technology today is nothing,” he said.

He said the commission had engaged auditors to look into its account for the 2021 financial year and should be completed in October.

Speaking earlier, Stanley Olajide, a committee member, observed that N3.5 billion was earmarked for computer equipment and training in the 2023 budget proposal.

“Looking at your projections for 2023, you have about N2 billion to spend on computer equipment. In 2022, what do you have for computer equipment? Also, in 2021, what do you have because we are going to be lending money to fund this budget or if you are not going to spend this money, it could be revenue for the government,” Olajide asked.

“What part of this can you suspend: N2billion for computer equipment and about one point something billion for training, what is the value money in spending this N3 billion in 2023? If you did something like that in 2022, why 2023 again?”

In his remarks, Abdullahi Saidu, deputy chairman, house of representatives committee on finance, directed the office of the accountant-general (OAGF) and Fiscal Regulatory Commission (FRC) to sit with NERC and reconcile its 2021 account.

He said the country was in need of funds, frowning at the delay in reconciliation which was impeding funds from going into the federation account.