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NERC adjusts electricity tariff for discos as FG absorbs N1.6trn subsidy 

Nigerian Electricity Regulatory Company (NERC) yesterday released a new tariff template with lowest electricity consumers to pay N68 per kilowatt consumption as the federal government absorbs over N1.6 trillion shortfall.

Under the Eko Electricity Distribution Company, consumers were meant to pay between N125 and N71 per kilowatt hour, but the allowed tariff stands between N68 and N32 per kilowatt hour. The subsidy payment across the different bands of A to E stands at about N57 on every kilowatt hour.

The company, according to NERC’s order, would spend about N180 billion in the next four years as operating expenses. N25 billion would be expended on metering under that period and N66.36 billion would be on capital investment.

Although the yearly revenue requirement of the company stands at N412.41 billion, it can only generate N115 billion under cost reflective situations. With the current arrangement, the company would generate N59.50 billion and expect N55.30 billion from the government as tariff shortfall.

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BEDC would spend N122.64 billion as operating expenses, N25 billion on metering and N14.28 billion on other capital expenditure. The company’s required yearly revenue stands at N269 billion. They will only be able to make N126 billion under a cost reflective tariff. Given the allowed tariff, the company would make N60 billion and expect N66 billion from Tinubu as tariff shortfall.

In Enugu Electricity Distribution Company (EEDC) which covers all the Southeast states, the real cost reflective tariff is between N147 and N96 per kilowatt depending on the tariff plan, which is spread between band A to E, but the allowed tariff, which is what consumers would be paying is N71 and N36 per kilowatt hour. This means that the Federal Government would pay between N76 and N35 on every kilowatt of electricity consumed in Enugu, Ebony, Anambra, Imo and Abia.

NERC has asked the EEDC to spend N25 billion on providing 260,000 prepaid meters to consumers in the region in the next four years.

The company would spend N12.6 billion as operating expenses in four years. The yearly revenue requirement is N241 billion, under cost reflective tariff, the company would make N128.49 billion but under the prevailing scenario, it would make N59 billion and expect N69 billion from the government.

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