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MYTO 2.0: NERC Sends Discos On Tariff Road Shows

Caught between pressure from distribution companies to increase electricity tariff and an outcry from the public against exploitation by the distribution companies (Discos), the Nigeria Electricity Commission (NERC) has pushed the task of convincing their customers to pay on the Discos.

Consequently, the companies which face the Transitional Electricity Market (TEM) regime have embarked on road shows to convince customers to accept a hike in tariff. Chief Executive Officer of Ikeja Electric, Engr. Abiodun Ajifowobaje, disclosed in consultation with the company’s customers weekend that the two day forum was part of what was designed by NERC as a process to determine new tariff structure for its consumers.

In urging the consumers within the zone to embrace a cost reflective tariff so that the company would serve them better, he said that DISCOs were just like a daily collector, adding that majority of the money paid to them were going to Generating Companies (GENCOs) and Transmission Company of Nigeria (TCN).

“Instead of NERC to fix the new tariff for electricity consumers, they now Distribution Companies (DISCOs) to consult consumers in the different zones and come back for approval and consequently, we have to consult
you on the way forward,” he said.

“Of every N100 collected from our consumers, only N15 goes to our pocket. We pay N65 to GENCO and TCN will N15 while others like NERC will share N10, so will be left with only N15 out of which we pay our workers salary and replace faulty equipment and others.

“To be honest with you, because we do not have a cost reflective tariff, most of the DISCOs have not even paid the other operators in the chain. “Due to crisis of litigation against the proposed tariff review, we have met with the Vice President, Mr Yemi Osibajo on the issue and the Vice President has called on DISCOs to go and negotiate with consumers and come back with good reasons for the tariff review,” he said.

Mr. Ajifowobaje urged consumers within the zone to be objective in dealing with the issue, adding that it would be difficult for the company to obtain loan from banks if they do not have cost reflective tariff.

Mr Olurotimi Oduntan, the Director, Association of Nigerian Electricity Distributors (ANED) said that government has ceased subsidizing power consumption in the country after privatisation. He said that due to the present tariff structure, DISCOs were not making any profit and if things continued this way, the power business might collapse.

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