Electricity consumers will pay only efficient tariff – NERC

The Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr Sam Amadi, has said that the Commission will ensure electricity customers pay only an efficient tariff.   

Amadi said this as he gave insight into the removal of technical losses as a component of tariff chargeable by electricity distribution companies while receiving a three-man of delegation of the European Union.   The Commission earlier in the year put collection loss at zero value unless a distribution company make case for its justification.

He said that the Commission questioned the framework that led to huge collection losses passed to electricity consumers and kicked against it because it was against international best practice and encouraged lack of performance on the part of the distribution companies.

We want a transparent, participatory and cost reflective tariff. We have outsourced the tariff making process to the distribution companies and provided them strict guidelines. The regulatory question is about what should be passed to the consumers. 

One school of thought is legalism and another is about what is right.  So essentially, we ruled out collection losses and put it at zero, Amadi said, adding that electricity distribution companies must consult with the consumers before it can approach the Commission for tariff review.

He informed the visitors that as part of Commissions drive to enhance electricity supply, it has been advocating embedded generation, which is already yielding fruits.

According to him, The process of improving power supply lies with embedded generation. For now, Ikeja Electricity Distribution Company is making progress and other distribution companies would soon follow suit.

Amadi explained that the industry is between 80 and 85 per cent gas dependant but that gas pipeline vandalism has remained a big challenge. He enthused that the East West gas pipeline if completed on schedule by 2016 would open the door for massive gas supply.

According to him, the problem of gas shortage is affecting revenue flow and it if could be resolved the issue of cost reflective tariff would be easily resolved. In his words, Non-commerciality of gas is a major constraint to gas supply as  some of the generators are unable to sign gas contract that should provide then guaranteed supply. 

He concluded that capacity constraint has remained a major challenge at the transmission level but that the completion of some of the 118 projects listed last year by the Transmission Company of Nigeria (TCN) would assist in removing the bottlenecks.

The visiting EU team, whose mission is to investigate how best to assist Nigerians get access to electricity revealed its interest was in the North East as leader of the delegation, David Cameron said, EU has conducted a feasibility study on embedded generation using solar panel in the North East.

Dr. Usman Abba Arabi - Head, Public Affairs Department 

email: uabbaarabi@nercng.org


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