Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi has announced plans to increase electricity rates that would amount to as much as 40% for some customers and 5% for others next month.
Speaking in a telephone chat from his Abuja office, he told The AUTHORITY on Sunday that the rise was caused by the fall in the value of the naira as well as rising costs which hinder efforts to end daily blackouts in the country.
Besides, the law provides for periodic price review when the cost profile changes, he said, adding that “we are working on a number of things and going through the processes.
“Some bills will increase 5% while others will see prices raised as much as 40% depending on the power provider and class of customer; the change in the rates will commence by middle of November.”
In an effort to boost power supply, it would be recalled that Nigeria dismantled its power monopoly and sold 15 state generation and distribution companies in 2013 to private investors in an attempt to end the crippling electricity shortages.
With that distribution, generated output has never risen above 5,000 megawatts, which is not in compliance with the peak demand, while the state-owned transmission system can’t deliver any more than that before it starts breaking down.
Possible efforts to boost power supply have been hindered by factors which include gas supply, foreign exchange and inflation that have increased the cost of energy and infrastructure for the power companies.
A slump in crude prices in the past year has put pressure on the naira, forcing the Central Bank of Nigeria (CBN), which bailed out the power companies last year, to twice devalue the currency since November.
The inflation rate climbed to the highest in more than two years in September to 9.4% Again, the governmentset rates have hampered the distribution companies from paying their bills to the power plants. Just before elections in March, the regulator banned them from charging consumers for losses caused by billing mistakes, effectively cutting the tariff by more than half in some areas.
This is the reason most of the distribution utilities couldn’t pay for their power supply