The Trade Union Congress (TUC), electricity workers, and consumers yesterday described as ‘negligible,’ the 8.1 per cent reduction in the tariff paid by Band A customers.
They called for a reversal of the tariff announced last month by the Nigeria Electricity Regulatory Commission (NERC) for Band A customers, saying there should not be segregation of electricity users.
The House of Representatives and Center for the Promotion of Private Enterprise (CPPE) Chief Executive Officer Muda Yusuf, however, described the review as a step in the right direction.
NERC which is the regulator of the nation’s electricity sector, had in a statement yesterday directed the 11 electricity Distribution Companies (DisCos) in the country to reduce Band A tariff from N225/kWh to N206.8/kWh for this month.
The DisCos immediately started complying with the order which NERC explained was primarily informed by the stability of the Naira against foreign currencies.
When the commission upped the tariff paid by customers on Band A feeders last month, it cited variables like the high cost of gas, prevailing exchange rate, and other macroeconomic factors as reasons.
However, there was an uproar over the adjustments from different quarters.
Yesterday, TUC which is the umbrella body of senior workers, said pre-April tariff of N66/KWh should be restored while NERC engages with stakeholders .
The union had during the May 1 Workers Day celebration, issued NERC a one- week ultimatum to return the tariff to the old price of N66/KKWh . The ultimatum expires today.
“Our ultimatum was very clear: revert to the old N66/KKWh not to reduce. Because the Electricity Act is very clear there should be stakeholders’ engagement. That was not done.
“ NERC has to revert to the old tariff and let there be stakeholders engagement in line with the provisions of the Electricity Act. So reducing it is unacceptable to us,” said TUC’s Deputy President Tommy Okon.
Also, National Union of Electricity Employees (NUEE) Ag. General Secretary Dominic Igwebike, said: ‘’We are asking for total reversal of the tariff for band A customers.’’
‘’To us as electricity workers, there should be no discriminatory tariff for Nigerians, “ added in a text message.
Consumers under the aegis of the Association for Public Policy Analysis (APPA), argued that the new rate of N206.80/kwh ‘’does not make any difference.’’
They wondered whether or not the reduction was enough incentive for manufacturers to remain in business or reduce the costs of their goods.
“Reducing it (tariff) what is the difference? N225, you are now reducing to N206.80. Industries are dying. What we should be asking is that this amount they are putting now, will it make the industry functional? Will it make the manufacturers to be able to manufacture more and reduce the costs of their products ?,” APPA National President Princewill Okorie, asked.
Recommending solutions to the Federal Government, Okorie urged it to reverse its policy on gas.
He said: ‘’Government should come up with a new policy that will spell out domestic gas obligation for power generation. Why should gas that is produced locally be sold to generating companies(GenCos) in dollars? How should Nigeria that lacks gas for electricity generation export the same product?
‘’It is not a patriotic policy. The solution we want is that the Federal Government should reverse the policy on gas.
“If gas is made available to the generation companies to generate electricity, tariff will be reduced. Why will we have gas in quantity and be buying gas in dollars in Nigeria and no percentage is reserved for generating electricity for Nigerians.
“Rather, the gas is sold abroad by private companies while citizens are suffering by paying high tariffs. It does not help. It is not a patriotic decision at all. Let gas be made available for GenCos.”
The APPA chief also called on the Federal Government to settle the N47 billion that its Ministries, Departments and Agencies are owing the DisCos.
He said that it was unfortunate that government’s decisions in the power were, more often, based on data from the DisCos and not those generated by any of its agencies .
Okorie asked: “Where are the data ? All these decisions taken in the power sector are they based on data from consumers generated at community level? Should the ministry (Power) depend of DisCos to give them report and not verify from the consumers.
“Who is overseeing consumers’ issues in the Ministry of power? Who is advising the ministry and the President on issues regarding power? Nobody.’’
But the House of Representatives which welcomed the 8.1 tariff reduction agreed that there is more to be done.
The House had on April 30 called on NERC to reverse N225/kWh tarrif increase. It also raised a committee to hold a public hearing with stakeholders in the power sector and Organised Labour.
Spokesman for the House Akintunde Rotimi told The Nation that the public hearing would proffer lasting solutions to frequent tariff increases by NERC and DisCos.
CPPE founder Yusuf said NERC had by the review shown that it was responsive to the peoples’ concerns
He added that he believes that the tariff slash, no matter how minimal, would have a positive impact on manufacturing in particular and electricity consumers in general.
Yusuf said: “The review is a welcome development and above every other thing it proves that NERC is sensitive to the concerns that have been expressed by the citizens, electricity consumers and the national assembly. It is a good development for manufacturers and electricity consumers generally.
“As to the factor of macroeconomic environment, I hope that if the situation changes may be by this month or next, NERC would not come back and start reviewing it again because there is also a need for stability in electricity tariff.
‘’Electricity is of strategic importance to the economy and not only for its comfort for the people but for the productivity in the economy.
‘’It is not a sector where we should be expecting another volatility because we have enough volatility in other sectors and no need adding that of electricity into it.’’
Why tariff was slashed, by NERC
Improvement in the exchange rate , among other macroeconomic parameters, induced the tariff reduction, said the commission.
It explained in a statement that the slash was in tandem with the tariff methodology covering this month.
“The commission has considered changes in the macroeconomic parameters over the preceding month of April 2024 and especially the appreciation of exchange rates – consequently the Commission has approved a downward review of end-user tariffs for Band “A” customers from N225/kWh to N206.8/kWh,” the statement read.
NERC also reiterated that it was committed to providing a balanced and effective regulatory regime serving the needs of the Nigerian Electricity Supply Industry (NESI).
In their separate reactions, the DisCos which complied almost immediately by reducing the Band A tariff, said they follow ‘’directives given by the regulators knowing they are in the best interest of all parties.’’
They assured customers of continued improvement in service delivery.
Ikeja Electricity (IE) Head of Corporate Communications, Kingsley Okotie, assured customers in Bands B, C, D, and E that their tariff ‘’remains unchanged.”
Okotie added: “We are a compliant Disco; we follow directives given by the regulators knowing it is in the best interest of all parties. We assure our customers of continued improvement in our service delivery as we strive to give them a better quality of service.
‘’Please be informed of the downward tariff review of our Band A feeders from N225/kwh to N206.80/kwh effective 6th May 2024 with guaranteed availability of 20 to 24 hours supply daily.’’
The Abuja Electricity Distribution Company said: “We are pleased to share with you the revised tariff for our Band A feeders, which will decrease from N225/kWh to N206.80/kWh effective today(Monday). We assure customers on our Band A feeders of continued availability of electricity supply for 20-24 hours daily.” (Nation)