The Senate urgently requested the Federal Government to intervene and prevent the 11 Distribution Companies (Discos) in the country from implementing the proposed increase in electricity tariff. Following this request, the Senate tasked the Committee on Power (once formed) to collaborate with the Federal Ministry of Power, NERC, and other stakeholders to address the challenges faced by the Nigerian electricity sector, which includes the necessity for comprehensive sector reforms.
Following a motion titled “Need to Halt the Proposed Increase in Electricity Tariff by Eleven Successor Electricity Distribution Companies (Discos),” sponsored by Senator Yunus Abiodun Akintunde, APC, Oyo Central, and co-sponsored by Senators Ekpenyong Asuquo, APC, Cross River South, and Aminu Iya Abbas, PDP, Adamawa Central, the Upper Chamber of the Nigerian Parliament has made several resolutions.
The Senate urged the Nigerian Electricity Regulatory Commission (NERC) to decentralize the proposed engagement with stakeholders, originally scheduled for Abuja, to the Six Geopolitical Zones of the Federation. This decentralization aims to ensure effective participation by all stakeholders.
Furthermore, the Senate called on NERC to thoroughly review the rate adjustment applications filed by the Discos, taking into account the interests of citizens, affordability, and the necessity for improved service delivery.
In addition, the Upper Chamber requested NERC to explore alternative measures to address the financial challenges faced by the Discos. These measures include improving operational efficiency, reducing technical and commercial losses, and enhancing revenue collection mechanisms.
The Senate urged the Discos to discontinue estimated billing and instead provide prepaid meters to all electricity consumers at affordable prices.
During the presentation, Senator Akintunde emphasized that there is no justification for the Discos to raise electricity prices, especially considering that the price of natural gas has not been revised. He also highlighted that the planned increase will have a significant impact on the affordability of electricity and further exacerbate the hardships faced by average Nigerians.
Senator Akintunde said that “The Senate: Observes that the eleven (11) successor electricity distribution companies (“Discos”) have filed an application for rate review with the Nigerian Electricity Regulatory Commission (NERC). The request for rate review is premised on the need to incorporate changes in macroeconomic parameters and other factors affecting the quality of service, operations and sustainability of the companies;
“Also observes that the Commission in line with its mandate has requested the general public for comments on the rate review applications by the distribution licensees; while advising interested stakeholders to review and take into consideration the excerpts of the Rate Review Applications filed with the Commission by the respective licensees;
“Aware that as part of the Nigerian Electricity Regulatory Commission (NERC) rule-making process and in the exercise of the powers conferred by the Electricity Act 2023, the Commission is empowered to conduct a Rate Case Hearing on the applications prior to making a ruling;
“Also aware that Nigerian Electricity Regulatory Commission (NERC) had through its official website published and set 20th July, 2023, deadline for comment by stakeholders;
“Worried that within the last within the last 10 years, billions of naira were spent by Senators across Nigeria in the procurement and installation of transformers through various Zonal Intervention Projects (ZLPs) as a result of the request in Senator’s various Constituencies.”
According to him, the Senate is “Also worried that when these transformers are supplied and installed it becomes registered properties of the Discos (a privately owned enterprise); while sadly same Discos have consistently refused to energize such Transformers on the ground that affected communities have to pay millions of naira arrears of bills for electricity never consumed while keeping the affected consumer in perpetual darkness;
“Concerned that the services of the 11 discos are currently bedevilled with total failure, occasioned by prolonged blackout due to lack of provision of relevant infrastructure like transformers, electricity poles, poor distribution network compounded with unjustifiable estimated billings, lack of supply of prepaid meters, reap off etc; and
“Also concerned that despite repeated previous increases in the multiyear tariff with assurances of improved service delivery by the Discos no commensurate improvement has been made by any of 11 Discos in their respective service deliveries to justify the previous increment,
“Further concerned that the: proposed increase will significantly impact the affordability of electricity for the average Nigerian, further exacerbating the financial burdens faced by households and businesses;
“Less than one week time frame window provided by Nigerian Electricity Regulatory Commission (NERC) for comments from all relevant stake holders is too small for any meaningful engagement;
“High electricity tariffs will impede industrial growth, job creation, and overall economic development. This will have adverse effects on the nation’s drive towards sustainable development and poverty reduction;
“It is essential to address the issues of inadequate power supply, metering, and quality of service provided by the Discos. Customers should not bear the brunt of inefficiencies in the power sector.”
