Erhuvwu Etarhienyo
Nigeria’s electricity regulator, NERC, has introduced new guidelines on electricity tariff adjustments amid public concerns over possible price hikes.
Sanusi Garba, the head of NERC, emphasized that the 2023 Electricity Act requires the commission to ensure that power companies can meet their expenses, remain financially stable, and generate a fair profit on their investments.
NERC determines electricity tariffs through the “Multi-Year Tariff Order” (MYTO). They conduct a major review every five years and notify electricity companies a year in advance of any significant price adjustments. The companies then have 120 days to submit documents justifying the need for tariff changes.
To request tariff adjustments, companies must submit their financial records, business plans, and evidence that they have engaged with customers regarding the proposed changes.
NERC follows a detailed review process for tariff requests. They begin by examining the submitted documents, which can take up to 90 days. Next, they publish their findings and open a 21-day window for public feedback. A public hearing is then conducted, and a final decision is reached within 30 days of the hearing.
NERC follows a structured process to review tariff requests. They start by analyzing the submitted documents, a step that can take up to 90 days. After that, they release their findings and allow the public 21 days to provide input. A public hearing is then held, and a final decision is made within 30 days of the hearing.
For minor and more frequent adjustments, NERC takes into account various factors, including fuel prices, inflation rates in both Nigeria and the US, exchange rates, and the level of electricity generation.
Olu Verheijen, the President’s energy advisor, has stated that a price review will take place soon.
“Today, the Federal Government spends over N20obn per month on electricity subsidies, but much of this support benefits the wealthiest 25 per cent of Nigerians rather than those who truly need assistance.
To address this, the Federal Government is working towards a targeted subsidy system to ensure that low-income households receive the most support. This approach will make electricity more affordable and accessible for millions of hardworking families,
” she stated.
