NERC reduces electricity tariffs after it stopped setting metre prices

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May 7, 2024
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2 min read
electricity
  • The Nigerian Electricity Regulatory Commission (NERC) has announced an electricity tariff reduction, which will take effect immediately. 
  • According to the commission, this development follows a thorough examination of macroeconomic parameters and exchange rate increases.
  • This exclusive development for Band A customers involves a reduction in end-user tariffs from ₦225/kWh to ₦206.8/kWh.

Following the NERC's direction, electricity distribution companies such as Ikeja Electric Distribution Company and Eko Electricity Distribution Company have acknowledged the reduction and "a guaranteed minimum daily power supply of 20 hours." 

In April 2024, the commission announced a significant increase in electricity tariffs for customers under the Band A category to ₦225 per kWh, a 240% increase from the initial ₦68 per kWh (kWh).

Band A customers are those who receive up to 20 hours of daily power supply, accounting for approximately 15% of Nigeria's over 12.82 million registered electricity users. 

Meanwhile, it was met with disapproval as the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) kicked against it, citing potential economic consequences.

On April 30, 2024, the House of Representatives directed the Commission to suspend the tariff hike, as well as other conditions in the newly issued review of the Multi-Year Tariff Order.  

The House announced the formation of a special committee made up of the Committees on Power, Commerce, Delegated Legislation, and National Planning to hold a well-structured hearing on price regulation in the Nigerian Electricity Supply Industry (NESI).

Amid this, the commission announced on May 1, 2024, the deregulation of metre prices under the metre asset provider (MAP) scheme, which means that the government will no longer control the metre, as prices will be determined through a competitive bidding process, with customers able to select from authorised vendors. 

Recall that in September 2023, the NERC approved a price increase for single-phase electricity metres to ₦81,975.16, and three-phase metres to ₦143,836.10. 

Per the commission, Nigeria has 5,885,687 prepaid metre users out of a total of 13,231,807 registered electricity customers and as of January 2024, all 12 electricity distribution companies in the country collectively metreed only 42,961 customers, accounting for only 1.54% of total registered customers.

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