There seems to be no applause as the 11 electricity Distribution companies (Discos) Monday, February 1, implemented their various tariff hikes approved by the Nigerian Electricity Regulatory Commission (NERC).
NERC announced in December that the Fixed Charge (FC), a component of the tariff that commits electricity consumers to paying static sum whether they consume power or not during a billing period has been removed. In the regime, while the Abuja Distribution company (Disco) customers paid N702 monthly in 2015, those in the Eko and Ikeja Discos paid N750, with similar charges across the other eight Discos.
Daily Trust on Sunday, however, observed that the approved 10 year tariff plan was rather integrated into the Energy Charge (now an entity) and not removed. Some experts said the addition had triggered the significant rise in the calculated tariffs.
Interestingly though, reports showed that the Ghanaian government had similar upward review of its electricity tariff in December 2015, most Nigerian residential consumers pay seven times what Ghanaians pay for electricity consumption from same exercise.
The Public Utilities Regulatory Commission of Ghana (PURC) which regulates electricity prices in the country, like its Nigerian counterpart, NERC approved an increase of 33.6 Ghana Pesewa (GHP) per kilowatt hour (kwh) from 14.6GHP obtainable in October 2015. For residential customers using between 0 to 50 units of kwh (known as R2 in Nigeria), they paid 1,041GHP plus service charge (the fixed charge in Nigeria) of 633GHP. When converted, this is equivalent to 16.74 Cedi (GHS) there. This is equivalent of about N900 in Nigeria.
Meanwhile, the higher kwh one is assumed to have used the more the payment for Nigerians with no given range of 0 to 50 as the case is in Ghana. An R2 in Nigeria on about 7.5kwh daily average consumption in the new tariff (without fixed charge) will pay over N6,000 which is about 121GHS, and about seven times more than what a Ghanaian pays; though the Ghanaian may use up to 50kwh in a country that relies on Nigeria to supply gas to power their electricity stations.
Many electricity customers are still devastated over reports that they would be required to pay more for less power consumed.
Daily Trust on Sunday sampled the views of customers, both residential and commercial users, across some suburbs in Abuja, Nasarawa and Niger states.
At Mararaba axis of Nasarawa State, some 15 kilometres from Abuja city centre, Jerry Musa who is billed as a commercial user for owing a sachet water factory said it was a critical issue to him especially when he calculated his January bill on estimation against the new value.
“I realised that I would be paying about 45 per cent higher than what obtained in January as a residential consumer in my house, and pay about 40 per cent for my factory again instead of the previous 35 per cent. I am devastated by this,” he said.
At Jikwoyi town in the Federal Capital Territory (FCT), several residential customers (R2) expressed disappointment over the increase, noting that the regulatory commission should have worked with the directive given by the House of Representatives to halt the new tariff regime.
Malam Abdullahi Nda who lives in a block of flats at Jikwoyi Phase III said his bills would be rising significantly as he has a three-phase power connection.
He said: “I believe the worst hit in this exploitative epidemic are most of us on the estimated billing system. The Abuja Disco has been fraudulently raising the average kilowatt hour (kwh) they said we consume and bill us as such even there it is rationing power and we get light for less than 15 days in a month.
“Now that it has risen from N14.70 to N24.30, it will be a galore for them and a fight for us customers. I learnt power has climbed to 5,000 megawatts (mw) last Tuesday but we are yet to feel the impact due to rationing,” Nda explained.
At Tunga area in Niger State where Abuja Disco recently installed some pilot meters, some customers said they are not aware of the gravity but believe reports that they would pay higher than expected.
An operator of a small business, a poultry farm, Mr Paul Bello said from the published tariff class by the Disco, the residential customer seems to be more affected. “It is not fair at all, they should have improved their services before thinking of any increase, but the reverse is the case.”
Some customers had earlier reacted to the issue before the increase on the social media. On the Facebook page of Abuja Disco, Adewumi Tolulope shared the view that they should have first improved supply.
He posted thus: “First improve on the light then we talk about new tariff. In my area it is two days off, one day on and even on the one day, it trips off. In a month we had light for eight to nine days. On top of it they will bring estimated bill. Which way are we going? Communities are buying transformers which should have been provided by the government. Who is fraudulent here?”
In a response, the Abuja Electricity Distribution Company (AEDC) said: “This is part of the improvement and by the grace of God we shall all smile. Please be patient with us as we are willing to serve you better.”
Aliyu Mamuda from Lafia posted: “This is the welcome development, another problem is poorer supply at Lafia area office.”
A customer Aro-Lambo Yusuf said he applied for meter months ago but has not gotten it. “I’m yet to receive my meter since September 2015. It’s quite pathetic, so disheartening.”
Labour to protest
The Nigeria Labour Congress, Trade Union Congress and civil society groups said they will hold a protest on Monday on the 45 per cent increase in electricity tariffs.
In a statement late last week, the groups said the protest will hold tomorrow, February 8, in Abuja and across the nation.
They had initially planned the protest for last Monday when the tariff regime was implemented but halted it for unknown reasons. Security then was beefed up by a combined team of the police and the civil defence corps at the Abuja Disco headquarters in Abuja.
“It is a nation-wide protest – meaning that the 36 states of the federation, including Abuja will be involved in this action,” Ayuba Wabba, the NLC president, said.
He added: “If you are an electricity consumer and you are not happy with the bills electricity companies serve you every month, you are invited to join this protest rally.”
The rally will start at the Labour House in Abuja with a march to the NERC headquarters, about two kilometres away, then to the Abuja Disco, also about two kilometres from the commission.
The groups said they would march to the National Assembly as part of efforts to get the power sector stakeholders to stop the tariff increase.
Minister backs tariff hike
From the recent comments by the Minister of Power, Work and Housing, Babatunde Fashola, officials will hardly backtrack. He had defended it last week during the ministry’s budgetary defence at the National Assembly. In his maiden press address last November, Fashola said the approved tariff will help to hold Discos to “a more efficient and fair collection system based on the use of meters, so that consumers pay for only what they use.”
He said: “I know that it has been a contentious matter, but I make this fervent appeal to consumers to give us the benefit of doubt, to forbear and accept it. The regulator, NERC, has been mandated to work out the fair market tariff and announce them when they are finalised.”
Fashola also noted that the policy will also affect those who propose it in their homes too “because we will need power in our homes, and so will our relations. Therefore we are not asking Nigerians to do what we will not do. The surest way not to have power is to oppose the implementation of the tariff order.”
Absence of meters worsens situation
A recent ministry report has said more than three million electricity customers are still without meters in Nigeria, as government raises tariff rates next month. It estimated the unmetered electricity customers to be about 45 per cent which is very significant in the electricity industry.
NERC had last week harped on energy conservation by switching off appliances when they are not in use. However, a consumer advocate, Mr. Kunle Kola Olubiyo, said that would not apply to the huge unmetered customers who are at the mercy of the Discos estimated bill through fraudulent allocation of average daily kwh consumption.
Reacting to the tariff increase, president of the Consumer Protection Network in Abuja, Mr. Olubiyo said the continuous increase in electricity tariff as experimented by NERC favours the Discos. He accused the Discos owners of not having cognate experience before the acquisition in 2013.
“As it is, experiences have shown that majority of the investors in the post privatization had no cognate experiences in power business and lack the expertise required to effectively manage the sector,” he said.
Olubiyo said the electricity tariffs implemented and its methodology lack scientific basis and justifiable global comparison, adding that many networks in the Discos are bad and cannot deliver the required service to customers even at the increased bills.
“In most cases, the transformers installed in newly commissioned power projects are substandard and ‘refurbished equipment’. The Discos have found it so convenient to shy away from their responsibilities using ‘the inherited poor grid infrastructures’ as its albatross and of course attributed its cases or refusal to invest heavily in the sector,” he said.
He urged the Discos to increase revenue collection efficiency, billing efficiency, and efficiency in customers’ relations. “The lines materials are despicably of poor quality and unsustainably below global standard. The metering gap in the industry is so huge that it would require sustained efforts to ensure that the Discos close it soon.
“There are whole lots of issues begging for attention in the sector, and tariffs/price rise is therefore not the only basis of determining the sector’s performance. The Discos have continued to shy away from installation of metering facilities on transformers to allow their customers do a scientific analysis of the actual load allocated to them,” he explained.
While customers try to adjust to the shock of the tariff, Daily Trust on Sunday has learnt that NERC has issued a circular directing the Discos to commence the computation of consumers’ billing (mostly the estimated customers) based on the new tariff from March 2016.