Power tariff collection improves to 78% –NERC

Revenue to Nigeria’s power sector has improved since the implementation of Service Based Tariffs that started in November 2020, the Nigerian Electricity Regulatory Commission said on Wednesday.

NERC also said that power users in bands A and B were now paying as much as 78 per cent of their electricity bills to electricity distribution companies since the commencement of the SBT.

Consumers in bands A and B are higher electricity users, who get greater quantum of power daily than others in bands C, D and E.

Speaking at the May 2021 virtual Power Dialogue in Abuja, the Deputy General Manager, Market Competition and Rates, NERC, Abba Terab, said there had been significant improvement in tariffs payment by consumers in the sector.

Power distributors had before the introduction and implementation of the SBT complained that many customers were not paying for electricity, a development that had often made Discos to remit about 30 per cent revenue to the sector.

But while speaking during the dialogue on Wednesday, Terab said, “As we speak, the current tariffs customers are paying is about 78 per cent of the cost reflective tariffs, which is a significant improvement and that is the aggregate revenue the Discos collect.

“Of course, not all customers are paying up to 78 per cent, but at least those on bands A and B are largely paying about that level or something very close to that level.

He added, “However, others are not paying up to that. So as we migrate customers, each six months to higher service bands, this number will reduce and hopefully by the next review in July, a number of customers will be moved to higher bands.

“And they will be getting higher improved services. Based on that, the improvement and payments upstream will increase.”

Terab explained that the Service Based Tariff was arrived at after several consultations with power distributors and stakeholders.

He said the rates were put together after thorough analysis of the Performance Improvement Plans submitted by Discos.

The NERC official said, “Today we have the SBT, which we have been implementing since November last year, or actually started in September but there was a pause in October.

“However, it kicked back in November and we have been implementing it and we have seen significant progress in terms of energy through-put from the generation companies, which recorded several milestones since we started.

“Most of the peaks for generation were recorded since the SBT kicked in and so it means that it is actually yielding the desired results as expected, which is part of the objectives of the Power Sector Recovery Programme.”