NERC Has Begun a Series of Evaluations of Electricity Tariffs.


The Nigerian Regulatory Commission for Electricity (NERC) as part of its efforts to complete the extraordinary review and minor review of the Multi Year Tariff Order (MYTO) 2020, the Nigerian Electricity Regulatory Commission (NERC) has opened a 21-day comment period for stakeholders.

The mechanism is for the tariffs of the Transmission Company of Nigeria (TCN) and the 11 Distribution Companies, according to the notice endorsed by NERC Chairman, Engr. Sanui Garba and released on Monday (DisCos).

“Stakeholders and the general public are encouraged to provide suggestions to the Commission over the next two weeks.

The deadline is 21 days from the date of this release, according to NERC.

It is unclear if this analysis will result in another tariff increase, as it is scheduled to begin in July and conclude in December 2021.

However, according to the NERC note, the review will be dependent on adjustments in inflation (currently 18%), foreign exchange (over N400), gas prices ($3.80), available generation capacity (approximately 5,000MW), and the Capital Expenditure (CAPEX) needed to evacuate and allocate available generation capacity.

The upward trend of these indices, especially inflation and forex, would indicate a tariff increase, but the government could continue to subsidize customers to mitigate the effects.

In a statement released in February, the Minister of Power, Engr. Sale Mamman, claimed that the federal government has been subsidizing DisCos’ electricity supply with N50 billion per month since 2020.

In the first quarter of 2020, NERC held meetings to consider TCN and DisCos’ respective five-year Performance Improvement Plans (PIPs), but no conclusions were reached.

NERC will complete the extraordinary Tariff Reform process with this review and launch the MYTO 2020 minor review in July 2021.

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