Reactions of Nigerians on Electricity Tariff Increase by NERC

Reactions of Nigerians on Electricity Tariff Increase by NERC

The news of the increase in electricity tariff approved by Nigerian Electricity Regulatory Commission (NERC) filtered in early this week. This news stated that from April 1, 2020, the 11 Electricity Distribution Companies (DisCos) in the country will review their electricity tariff upward.

According to NERC, this upward review, which was last done in 2015, was necessary as a result of four factors – inflation, exchange rate, US rate of inflation and gas prices. These were stated in the agency’s December 2019 Minor Review of Multi Year Tariff Order (“MYTO”) 2015 and Minimum Remittance Order for the Year 2020, which can be accessed from here.

This new increase shows that most tariff plans will increase by the addition of an extra N10 – N25 per unit, depending on the tariff plan and DisCo. However, going through the tables of new rates for different DisCos, I realised that electricity consumers under Enugu Electricity Distribution Company (EEDC) have been paying the new rate for some years now. It is obvious that what we are waiting for is the year 2021 tariff rates and not that of year 2020.

Anyway, the major reason for dropping this article is to lend a voice to many Nigerians, who have one or two things to say to NERC and the Nigerian DisCos.

It is pertinent to note that Nigerians don’t trust NERC and any of the DisCos to provide them with uninterrupted power supply. No Nigerian received the news of the tariff increase with relish. They all expressed their scepticism and suspicion towards the intention of the government agency. A lot of people pointed out the coincidence of the tariff increase and minimum wage implementation, wondering if the federal government is indirectly collecting its money back from the citizens. Then there are those that speculated that the government wants to overtax the citizens so that it will cover up its incompetency.

From the opinions and complaints of Nigerians towards the tariff increase, I noted that three distinct groups exist, all of which require the attention and consideration of NERC and Nigerian DisCos.

GROUP A

Those that belong to this group are the people that are willing to welcome the price hike so long as there is an improvement in power supply. Among these people are business owners that are tired of the high cost of running their businesses with generators. People in this group also complained of the noise and air pollution that comes from power generators. However, they are of the opinion that the only condition in which they will welcome the new electricity tariff is if they will enjoy 24-hour power supply. Failure of this means they will resort to generating their own power through solar, micro-hydro and wind power plants. In fact, a lot of people are considering these business options as I write now.

GROUP B

This group comprises of the people that insist that the tariff shouldn’t be increased for any reason. They hold that the current rate is even too high because a lot of people pay for what they didn’t get. Most of the people under this group are those that are still stuck with the Estimated Bill method and those who do not use electricity for any form of business. According to a person here, he’s billed #12,000 every month even though he couldn’t boast of 5 hours of power supply daily. He couldn’t then imagine what the new bill will cost if NERC is allowed to have its way.

There is something that NERC needs to note about this group. The members are bitter and they feel cheated. They believe that the DisCos in their areas are extorting them. A lot of them claimed to have applied for prepaid meter but have not gotten it because their DisCo benefits more from Estimated Bill method. To this group, increase in electricity tariff rate is a form of corruption.

GROUP C

I met this group in my village, Awkuzu, Oyi Local Government Area, Anambra State; and I believe they exist in every part of the country. When I told some people in my village that “NEPA” was about to increase their tariff rate, I got funny answers that ranged from, “For which light? The one we see or the one we don’t see?” to “They should carry their light; we are used to the darkness.”

This group no longer cares about power supply. They have settled to using generators in running their businesses and they know how to conserve fuel. When their phones’ batteries run down, they take them to business centres where they are fully charged at #50. At home, they use kerosene lamps and rechargeable torches to manage the darkness. Occasionally, when the need arises, they power up their generators do a little “oyinbo”. They heat up their food to keep it “fresh” and they keep their water in cool dark corners to keep it cool. In fact, these people have settled to a lifestyle that ensured that lack of electricity does not disrupt their activities. So when you tell them electricity tariff is about to be increased, they don’t care a bit.

If NERC has considered all factors and deem it fit for the tariff to be increased, no one can stop them. But there is a need to consider consumers’ satisfaction too. The first thing the agency should do is to compel all electricity distribution companies to issue out prepaid meters before April 1. That way, consumers can monitor and manage how they consume power. As for uninterrupted power supply, that is still something in our wish list; we will know when it is about to happen.

NERC and DisCos should also remember that Nigerians are considering alternative sources of power. If they fail to improve, one day they will wake up and find most of their customers are gone.

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