FG increases electricity tariff again

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FG increases electricity tariff again
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The federal government has once more raised the national electricity tariff that consumers must pay.

The Nigerian Electricity Regulatory Commission approved the increase in tariff because it would go into effect on January 1, 2021. The increase varies depending on the class of consumer.

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In its December 2020 minor review of the Multi-Year Tariff Order and Minimum Remittance Order, which our correspondent in Abuja was able to obtain on Tuesday, the NERC announced the tariff increase.

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Just two months after the government, acting through NERC, enacted a tariff increase in November 2020 that was met with strong opposition, the new tariff is now in effect.

Order NERC/225/2020, the order that contains the most recent rate increase, was signed by Sanusi Garba, the new chairman of NERC, and it replaces Order NERC/2028/2020.

The commission explained the latest tariff increase’s justifications, citing the N379.4/$1 exchange rate as of December 29, 2020, and the increase in inflation of 14.9% in November 2020.

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Other factors included the availability of generation capacity, the 1.22 percent inflation rate in the US, and the capital expenditures made by power companies prior to the tariff increase.

Results showed that, in contrast to the one from November 2020, which exempted low electricity consumers, the revised Service-Based Tariff saw an increase in the rates payable by the various classes of electricity users.

The commission further stated that the new tariff would be in effect until June 2021 and would be replaced from June through December 2021 by a cost-reflective tariff.

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The commission had announced last month that it was conducting a review for another tariff, which is why the most recent order announcing a rise in the rates that consumers must pay was issued.

The commission increased the price of electricity in September of last year, but organized labour reacted angrily and threatened to go on a nationwide strike.

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Following several rounds of negotiations, the tariff was lowered based on the types of consumers and the number of hours that an electricity user received power.

Power distribution companies started implementing the updated electricity tariff that was jointly decided upon by organized labor and the Federal Government on November 1, 2020.

The Federal Government would not go back to the service reflective tariff that went into effect on September 1, 2020, which caused a nationwide uproar, the Nigeria Labour Congress had informed newsmen.

Joe Ajaero, Deputy President of the NLC and General Secretary of the National Union of Electricity Employees, reported that most categories of the September 1, 2020 tariff increase had been revised downward.

But two months after enacting the updated tariff, which saw a range of rate increases, the government raised the tariff once more.

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