The Transmission Company of Nigeria Plc (TCN), has demanded for a review of the current electricity tariff, ostensibly cost reflective, which will entail more payment by the end users of power.TCN demand was contained in an application filed to the Nigerian Electricity Regulatory Commission (NERC), for an extraordinary tariff review, as a means of ensuring that generation companies (Gencos) are incentivised to provide sufficient spinning reserves and other ancillary services that are critical for managing the national grid.
The Transmission Company is the only unit of the 18 successor companies unbundled from the defunct Power Holding Company (PHCN) that was not privatised alongside others, but placed under management contract.
Hitherto, Distribution Companies (Discos) had been at the fore of agitations for electricity tariff review and increase, while consumers are opposed to it due to the prevailing power outages.
The issue is now precarious. The generation companies (gencos) do not see the pricing as optimal to waste their efforts generating power. The distribution companies (discos) do not even bother accepting all available electricity to sell to consumers. Discos think it makes no sense selling something at a loss. And the consumers do not want to see any increase because the past ones have not resulted to any improvement in power supply.
Technically, everyone is right. But I do think, focusing on that misses the point. In my office in Nigeria, the national grid is now the second backup. In short today, we are servicing our main generator. Team has suggested that we disconnect from the national grid to avoid any justification of sending bills which continue to happen despite no power supplied. I told them to hold on. The consumers are indeed frustrated. The process is a mess. You are asked to pay for services not delivered.
But ranting from that angle will not solve this paralysis. The only part of the old NEPA/PHCN that was not privatized, the Transmission Company of Nigeria (TCN), has spoken. TCN has joined gencos and discos asking for a reflective tariff. Government should listen. While I do not want to pay more as a user, the alternative of running two generators, spending more on fuel, oil and mechanics, is not a better option. I am open to pay more because I do think getting power from the national grid will be cheaper when compared to what I have now. Government should listen and take action.
Mr. President, if the court had struck the increased tariff, ask the Attorney General to support the Nigerian Electricity Regulatory Commission (NERC) which I understand is challenging the ruling in the court. Until we can fix this pricing issue, we will not make progress.
Nigerian government has to make good, and go back, and increase electricity tariff as agreed pre-privatization. The citizens do not have to pay this extra fee. Government can decide to write the discos cheques yearly. After all, it tricked the investors to invest based on the tariff. That the court struck and reversed the tariff is irrelevant. Investors did not sign any agreement with the court. That was the condition precedent and where it was voided, the discos have the rights not to deliver electricity. It makes no sense for them to be doing so losing money.
A reflective tariff is critical for us to get out of this vicious circle. Only Mr. President can lead now.