Ripples over electricity tariff

 Ripples over electricity tariff

Have electricity Distribution Companies quietly increased electricity tariffs? Yes, said some consumers; no, others said. Government sources however insist it has put measures in place to ensure the cost of electricity remains stable over the next two years, reiterating that instead of an increase in electricity tariff, there has indeed been a reduction, Muyiwa Lucas, John Ofikhenua, Onimisi Alao, Damian Duruiheoma, Kolade Adeyemi, AbdulGafar Alabelewe and Yinka Adeniran reports.

He was obviously seething with anger and this could be well understood. Tayo Olatoye, an electricity consumer on Ikeja Electric (IE) platform, had sent his son to purchase N3, 000 worth of electricity units from an IE vendor last Wednesday. However, upon loading the token, he was shocked at the number of units he got.

“On January 16, I bought 66.6 units of electricity for N3, 000, but to my surprise, last Wednesday, the same N3, 000 worth of electricity gave me 62.4 units of electricity. Previously it used to be N45 per unit but on Wednesday I noticed that it now goes for N48 per unit. This is shocking because no announcement has been made about an increase in the cost of the tariff,” a bitter Olatoye said, brandishing the purchase receipt issued to him.

Explaining a trajectory of tariff increase he has experienced, Olatoye lamented the almost 100 percent increase in tariff experienced in just about one year. For instance, he noted that last year, IE charged N29 per unit, increasing gradually over time to N45 per unit last month and now N48 last week.

“Last year, at N29 per unit, I got 103.4 units of electricity for N3, 000, but now the same N3, 000 gives 62.4 units. This is almost half of what it used to be in just one year,” Olatoye lamented.

Similarly, Timi Michael, another customer of IE in Akute, was taken aback last Friday when he realised a reduction in the number of units he got on his N10, 000 electricity purchase. Michael, who couldn’t comprehend the shortfall, explained: “Last January, I bought N10, 000 worth of electricity from IE vendor and got 221.8 units of electricity for it. But last Friday, I was surprised to notice that the same N10, 000 worth of electricity I bought fetched me 208 units. This is shocking. It means IE has increased electricity tariff without notifying us (customers).”

An IE sales agent who pleaded for anonymity also confirmed the tariff increase. According to her, an electricity consumer a fortnight ago purchased N100, 000 worth of electricity units from her in anticipation of the increase.

If the consumers of IE are in shock over the reduction in units, then the customers of Yola Electricity Distribution Company (YEDC) may not be faulted for expressing their angst over the hike in their electricity bill. Residents of the state capital, Yola, led the protest against a rise in the electricity bills, with many considering alternative sources of power.

According to sources, the issues started towards the end of last month when new management in YEDC sent out bills that consumers said had been jacked up by between 150 and 200 percent.  Many communities around the three metropolitan local government areas of Yola North, Yola South and Girei had reacted by advocating the return of the bills to YEDC with a resolve that the electricity distributor could remove their supply cables if they wished.

However, while IE and YEDC consumers are lamenting tariff hikes, it is a different kettle of fish for electricity consumers on the platform of Enugu Electricity Distribution Company (EEDC). According to them, the tariff by the DisCo has rather been reduced in the Enugu DisCo coverage area.

Some of the customers who responded to questions from our correspondent said they were not interested in the tariff hike but how regular the electricity is. One of the customers, who identified himself as Jude Egbo, said: “I don’t know how to calculate that thing. What I do is to pay whenever my light finishes so that they will give me light. I don’t count those things.”

In Jos, residents interviewed told The Nation that, they were yet to see or experience an increase in their electricity tariff. A cross-section of residents in the state told The Nation that no disco staff has told them of any increase yet.

In Kaduna State, metered electricity consumers said they have not noticed any increase in the electricity tariff. However, consumers on the estimated complain of what they called ‘crazy billing’ in spite of the epileptic service they get.

Some of the consumers who spoke to The Nation complain that Kaduna Electricity Distribution Company (KEDC), has deliberately refused to meter the majority of the consumers.

A consumer, Tijani Umar Sallau said, that they are paying high as customers on estimated billing and the solution of for the distribution company to provide meters for the consumers, but “they will not provide us with prepaid meters because they are not tired of manufacturing figures.”

At the Ibadan Electricity Distribution Company (IBEDC), no it was gathered that no tariff increase has been announced or communicated to the distribution company by the government electricity regulatory agency in recent time.

According to a source who craved anonymity, explained that although the Multi-Year Tariff Order (MYTO) as established by the Nigerian Electricity Regulatory Commission (NERC) allows for small and sort of insignificant review of tariff periodically, nothing major had happened since the last review by the Commission last year.

According to the source, IBEDC just like any other Disco does not have the power to unilaterally increase tariffs outside of the NERC established methodology for regulating electricity prices called MYTO.

The source added that the MYTO provides a 15-year tariff path for the Nigerian electricity industry with limited minor reviews each year but that no review has been communicated to the distribution company lately.

“It’s usually like N1 or 2k or even less just like it was done in the last tariff regime. MYTO allows for little and minor reviews but nothing major but I have not even heard of any minor reviews. We are still on the review approved for the year by the regulatory agency.

“They do it and when they approve it, and it allows for that in every six months there is always little review that could be a small as 50k, N1, 30k and figures like that until they Dona major review which consumers would now feel more that there is a hike,” the source explained.

There appears not to be a universal tariff increase, the reduction in electricity units, consumers contend, is an indication of a secretive increase being carried out by the DisCos affected.

Recall that last August the NERC had directed the DisCos to commence the collection of Service Based Tariff (SBT) from the following month. This was targeted at increasing the cost of electricity by over 50 percent, in order to enable the government to end subsidy in the electricity sector. But shortly after the statement went public, a top government official stated that the statement was issued in error and there was a stoppage on the directive.

Although the DisCos have not officially announced a hike in their tariffs, customers’ complaints that the energy distributors have devised a way of reducing the units for the same amount is tantamount to increasing the tariff since it has reduced the units they used to purchase for the same amount.

Yet, stakeholders in the sector maintained that the increase in some quarters may have confirmed the suspicion that the SBT may be implemented in phases without drawing the attention of the end-users.

 

Response

 

A code of silence seems to pervade the IE, the Eko Electricity Distribution Company (DisCos) and even the Nigeria Electricity Regulatory Commission (NERC). The Nation’s effort to get IE’s reaction to the development proved abortive as calls made to IE’s Head, Corporate Communications, Felix Ofolue, was not answered, neither was a text message sent to him replied to since last Thursday till the time of going to press.

The General Manager, Corporate Communications, Eko Electricity Distribution Company (EKEDC), Godwin Idemudia, did not respond to calls made to his line. However, his deputy, Babatunde Lasaki, assured him to revert on the subject once he confirms from the firm’s regulatory department. But five days after, Lasaki was yet to fulfill his promise.

Also, Abdulaziz Abdullahi, spokesman for KEDC, did not respond to several calls put across to him.

Similarly, attempts to get the reaction of NERC proved abortive as calls made and text messages sent to the General Manager, Public Affairs, NERC, Dr. Usman Baba-Arabi, were unanswered.

However, the spokesman of the EEDC, Emeka Eze, said the tariff on its platform has been considerably reduced. He told The Nation: “We operate the Multi-Year Tariff Order (MYTO) 2020, as approved by the Nigerian Electricity Regulatory Commission (NERC) and in February – December 2022 portion of this Order, which became effective on January 1, 2022, the approved End-User tariff for EEDC dropped across the Service Bands. That means that the tariff reduced”.

Still, the spokesman of Jos Electricity Distribution Company (JEDC), Dr. Friday Elijah told The Nation that there has not been any increase in tariff by the firm. “You may wish to check our website. Our tariff is there.”

 

Government effort

 

Sources in the Presidency told The Nation that determined to ensure stability in electricity tariff the Federal Government has stopped returns on its investments in the electricity sector. The government owns the Transmission Company of Nigeria (TCN), which wheels energy from the generation companies to the distributors 100 percent. It also owns 40 percent shares in the 11 Electricity Distribution Companies (DisCos).

Besides, the source informed that the Federal Government has decided to freeze its own profit in the next one to two years. This, according to the source, is to avoid hiking tariffs in the next two years. He added that the essence is to retain the subsidy in order to contain rising electricity rates.

 

Denial

 

But the government has also denied any recent increase on electricity tariff as the moratorium on her investment is to serve as a buffer against any increase on the side of the consumers. This initiative was implemented in the third quarter of 2021 in addition to the government reducing the price of gas in the fourth quarter of 2021 to Generating Companies (GENCOs). The results of these efforts led to a reduction in tariff as witnessed in Enugu DisCO where there is a substantial decrease in most bands.

Sources in the industry contend that the government is executing a balancing act between economic factors and electricity prices.

“The N3 claim is not true. Tariff orders are every six months not in February (December and June). The government has frozen returns on investment in TCN and DisCos in Q4 to prevent tariffs from going up, in addition to reducing gas prices in Q3. There is no universal increase and in DisCos such as Enugu there was a substantial decrease in most bands,” the source said.

 

Labour warns

 

Meanwhile, the Labour Congress said it was committed to the implementation of September 28, 2020, which recommended that electricity tariff be frozen until the seven-man committee concluded its work and its report was submitted and adopted by the principals in the broad FG – Labour platform led by SGF, and the President of NLC and TUC, respectively.

The NLC said: “This pact to freeze electricity tariff increase entered into by the Principals last year September remains sacrosanct to Congress and would not admit flouting by any form of subterfuge.”

The seven-man Technical Committee is made up of Minister of State for Labour and Employment, Festus Keyamo, (Chairman); Minister of State Power, Mr Godwin Jedy-Agba – member; Chairman National Electricity Regulatory Commission as a member and the Special Assistant to President Muhammadu Buhari on Infrastructure, Ahmad Rufai Zakari as Secretary.