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PHCN-SUBSTATION-AT-MAKERI     The Nigerian Electricity Regulatory Commission has announced a N750 fixed charge. NERC Chairman, Dr. Sam Amadi, announced in Abuja that the new tariff would take effect from June 1 as provided for in the Multi-Year Tariff Order. He said that the MYTO provides for bi-annual reviews that take effect on June 1 and December 1 to ensure that some critical and financial variables underlying electricity tariff in Nigeria were realistic, fair and current. Mr. Amadi said the variables that determined the methodical reviews included rate of inflation, exchange rate, gas price and available power generation capacity in the country. “The MYTO provides that where the review shows that the aggregate of these variables have changed by plus or minus five per cent of the MYTO figures, the changes are significant and would result in a review of the tariff. “The present review shows certain significant changes. For instance, whilst MYTO had projected an inflation rate of 13 per cent, the inflation as at March 30, is 7.8 per cent which is 5.2 per cent less than projected. “Similarly, MYTO projected an exchange rate of $1 to N178, but the March 30, 2014 data from the CBN shows a rate of N157.30 to $1, which is 11.6 per cent less than projected,” News Agency of Nigeria reported. Amadi also said that the new tariffs would not be equally served to consumers nationwide. He said some parts of the country would have reduced tariffs and others a slight increase based on the population covered by each DISCO, amount of electricity allocated and facility available to each DISCO. The NERC boss said that the review indicated a reduction of the wholesale tariff that would be paid to electricity generating companies from June 1. He also noted that the cost of the energy charge would have been much higher if not for the good macroeconomics management that produced a real reduction in wholesale generation tariffs. He said that if the review had not been carried out, the fixed charge would have increased from the current N750 to about N1,500. “The energy charge component for each DISCO would also have increased depending on the power allocation to the DISCOs,” he added. The NERC boss said that the three components that made up the total tariff paid by consumers included the generation, transmission and distribution. He described the gas challenge to the power plants and said that the fixed costs incurred in the three components earlier mentioned would be spread over a much lower quantity of energy projected to be sold to consumers. Amadi said NERC would continue to ensure that electricity consumers had access to adequate and reliable electricity and put in place mechanisms for improved service delivery from the new electricity companies.  

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This article was first published on 28th May 2014

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