That some of these states had established their electricity market laws and were waiting for the approval of the Nigerian Electricity Regulatory Commission to have independent regulatory bodies different from the NERC owned by the Federal Government.

As the states stepped up efforts to generate electricity, the Federal Government’s 240 per cent power tariff hike for consumers in Band A enjoying 20-hour electricity attracted more condemnations on Thursday.

Groups including the Petroleum and Natural Gas Senior Staff Associations of Nigeria, civil society organisations and the Nigeria Electricity Consumer Advocacy Network warned that the hike would worsen the plight of Nigerians.

The subsidy on electricity has been withdrawn completely from the tariff payable by power consumers in the Band A category, who constitute about 15 per cent of the total number of power users across the country.

The government, through the NERC, announced the hike in the electricity bill on Wednesday, adding that those affected would now pay a tariff of N225 per kilowatt-hour, up from the previous rate of N68/kWh, representing about 240 per cent increase.

However, there are strong indications that many states are taking advantage of the new Electricity Act to establish their electricity generation firms.

In June 2023, President Bola Tinubu signed a new Electricity Act into law, heeding the calls of Nigerians that the power sector be reformed and removed from the exclusive list, to give states the power to generate, transmit and distribute electricity within their jurisdiction. This, Nigerians believe, would help in proffering lasting solutions to the electricity problems in Nigeria.

The new law replaces the 2005 Electricity and Power Sector Reform Act as it seeks to promote private sector investments in the power sector. It provides for a holistic integrated resource plan and policy that recognises all sources for the generation, transmission, and distribution of electricity.

Various public notices from some of the Discos seen on Sunday had stated that the electricity tariff would be raised by about 30 to 40 per cent for selected categories of consumers on July 1, 2023.

In a public service announcement from the Abuja Electricity Distribution Company, for instance, the Disco had said, “Effective July 1, 2023, please be informed that there will be an upward review to the electricity tariff influenced by the fluctuating exchange rate.

“Under the MYTO (Multi Year Tariff Order) 2022 guidelines, the previously set exchange rate of N441/$1 may now be revised to approximately N750/$1 which will have an impact on the tariffs associated with your electricity consumption”

But in an appeal by the same AEDC, issued on Monday, the firm asked its customers to disregard the planned tariff increase as approval for such an increment had not been received.

“Please disregard the circulating communication, regarding the review of electricity tariffs. Be informed that no approval for such increments has been received. We regret any inconvenience,” the AEDC stated in its latest announcement.

A senior official in NERC confirmed that the regulator had not given the Discos approval to announce the hike in tariffs.

The commission did not give them such approval,” the official, who pleaded not to be named due to lack of approval, stated.

Reacting to the development, a former spokesperson of the AEDC and seasoned expert in the sector, Olabode Fadipe, said, “NERC never publishes any position or makes any official statement. It is the Discos that does that. Once the Discos receive approval from NERC, they effect the adjustment straightaway.

Discos perhaps got approval for 1st July and chose to put their customers on notice only to be told that their action was hasty. That end users have been told to ignore the message does not mean that the increase won’t be affected.

On Friday, the NLC, Discos and the Nigerian Electricity Regulatory Commission were heading for a collision course over the planned hike in the tariffs payable by electricity consumers nationwide.

NLC President, Joe Ajaero, had said “the plan to increase electricity tariff by 40 per cent by July 1 was both insensitive and callous and reflects an organised indifference to the wellbeing of consumers, especially, the poor ones,” and warned against the move by Discos.

But in different notices to their customers seen by our correspondent on Sunday night, the Discos announced that electricity tariffs would increase from July 1, 2023, as they provided reasons for this.

In a public service announcement from the Abuja Electricity Distribution Company, the AEDC said, “Effective July 1, 2023, please be informed that there will be an upward review to the electricity tariff influenced by the fluctuating exchange rate.

“Under the MYTO (Multi Year Tariff Order) 2022 guidelines, the previously set exchange rate of N441/$1 may now be revised to approximately N750/$1 which will have an impact on the tariffs associated with your electricity consumption.

“For customers within bands B and C, with supply hours ranging from 12 to 16 per day, the new base tariff is expected to be N100 per kWh while Bands A with (20 hours and above) and B (16 to 20 hours) will experience comparatively higher tariffs.”

The power firm stated that “for customers, with a prepaid meter, we encourage you to consider purchasing bulk energy units before the end of this month as this will allow you take advantage of the current rates and potentially make savings before the new tariffs come into effect.”

It added that “for those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August.”

Also confirming the hike, the Ikeja Electricity Distribution Company said, “Dear customers, electricity tariffs are set to go higher on July 1st due to the floating exchange rate.

“MYTO 2022 set the exchange rate at N441/$1, which may now be adjusted to about N750/$1.We may be looking at a base tariff of N100 per kWh for Band C (12 – 16 supply hours per day).

“Bands A (20 hours and above) & B (16 – 20 hours) will be much higher. If you have a prepaid meter, buying bulk energy units for your home or office before the end of the month may help you make some savings before you have to buy at the new rate.”

It stated that for those on post-paid (estimated) billing, a significant increment was imminent in your monthly billing, starting from August.

“Please take note. Electricity units are set to jump by 30 to 40 per cent in just over a week. You are best advised to buy as many units as you can before July 1.”

Speaking on the issue on Sunday, they demanded the Federal Government to order the power distribution companies to reverse the tariff hike, stressing that it came amidst the severe economic crisis in Nigeria currently.

They also stated that power distributors increased the electricity tariff payable by consumers without following due process as contained in the Multi Year Tariff Order.

Since the hike tariff was confirmed by a Disco last week, several condemnations had trailed the development, despite the silence of the industry regulator concerning the issue.

electricity distribution companies had quietly increased the tariff payable by power consumers across the country.

The report stated that though most of the Discos did not make this public, electricity users kicked against the move, describing it as “a perfect robbery” amidst the harsh economic realities in Nigeria currently.

The Abuja Electricity Distribution Company, which confirmed the tariff hike while responding to a Twitter user on Wednesday, explained that it was based on the order of the Nigerian Electricity Regulatory Commission.

On his part, a legal consultant and energy law advisor, Prof. Yemi Oke, explained that power tariff increases were meant to follow some laid down procedures, but stressed that this was neglected in the implementation of the recent hike.

He said, “Every increase in electricity tariff must follow a Multi-year Tariff Order. The year 2020 was the last order which speculated a bi-annual review to determine tariff increase.

“The MYTO- must be reviewed and specifically authorise tariff increase after following laid-down rules including wide consultations. All these have not been done.

“Even in my inaugural lecture, I captured this same anomaly in the previous tariff increases. This new one shows they’re determined to continue to take Nigerians for granted.”

Also, the President, Nigeria Consumer Protection Network, Kunle Olubiyo, said the Federal Government had eventually withdrawn subsidy on electricity tariffs.

He said the NERC had given the power distributors an open cheque to effect minor tariff reviews under the reflective tariff and service-based tariff schemes.

It is on authority that I tell you that the Federal Government has finally withdrawn all manner of subsidies on electricity tariff for Band A category of consumers,” he stated.

He added, “The Federal Government in the selection of Band A category of electricity consumers felt that those of us on Band A should be able to afford any amount placed on tariff for electricity. This is confirmed and instructive. There is no gain for any institution to deny this reality.

“Under the reflective tariff and service-based tariff, as a condition precedent to increase in electricity tariff, the NERC has seemingly given the 11 electricity distribution companies an open cheque to carry out periodically, minor tariff adjustments.

“This is not minding the place of regular engagement and consultation, which in the past had turned out to be a smoke screen and just to fulfil all righteousness.”

Olubiyo stated that power consumers on Band A would have to pay more for electricity, as the increase in Band A tariff took effect from January 2023.

He said, “The major challenge before the regulatory institutions, as represented by NERC, is that the commission, more than ever before, needs to arise and wake up to its responsibility of effective monitoring of distribution licensees/electricity market, and further demonstrate the ability to be an incorruptible judge and impartial and fearless arbiter.”

Meanwhile, the 11 electricity distribution companies earned about N597bn on electricity sales within the space of 12 months, according to data obtained from the Nigerian Electricity Regulatory Commission.

The NERC data showed that revenue from energy sales by Disco was made between January and December, 2022.

A breakdown of the report, ‘Discos’ Energy Sales by Service Band Data for Nov 2020 to Sept 2022’, showed that N597bn was collected out of a total of N840bn billed by the utility firms.

A total of 16 billion kWh of electricity was billed by the 11 Discos during the year under review.

Although Abuja Disco billed N109bn worth of electricity, however, it was able to collect about N91bn.

While Benin Disco billed N89bn, the utility firm was able to collect N51bn.

Eko Disco billed its customers N97bn, however, the firm was able to attain N89bn collection.

Furthermore, Enugu Discos churned out a bill of N75bn, but was able to rake in N52bn in the year.

On its part, Ibadan Discos, one of the utility firms liquidated during the year under review, billed out N101bn, but was able to collect about N67bn.

Ikeja Disco billed out the highest with N130bn, and recorded the highest collection of N120bn.

Jos Electricity Distribution Company sent out bills worth N45bn, but was able to recover about N20bn.

Kaduna Discos billed 58bn, collected N21bn; Kano billed N53bn and raked in N34bn; Port Harcourt Disco, N64bn but recovered N41bn; while Yola Discos, still being run by the government, sent out a bill of N18bn, but was able to rake in N10bn, making it the least earner among the utility firms.

On his part, National President Electricity Consumers Association of Nigeria, Chijioke James, insisted that the interest of consumers must be considered as the government makes the second move in the privatisation process.

The plants are Egbin, Kainji, Azura-Edo IPP, Jebba, Delta, Shiroro, Odukpani, Afam VI and Geregu with a minimum share of 5.76 per cent each.

Statistics obtained from the Nigerian Electricity Regulatory Commission, NERC, on the latest report, ‘State of the Industry NERC Annual Report 2020’, revealed that over-reliance of the grid on the energy supplied by just nine power plants out of 26 might pose a risk to the industry.

This was because downtime in any of them might result in grid instability if there was no adequate reserved capacity from other plants to timely offset adverse impact of any sudden loss of generation from any of the 9 plants, NERC said.

According to the report, the nine power plants accounted for 71.80 per cent of the total electric energy generated in 2020.

Due to its size and availability, Egbin power plant accounted for the highest share,13.54 per cent of the total energy output, followed by Kainji hydropower plant which accounted for 8.31 per cent energy share. Azura Edo, Jebba, Shiroro and Delta were also among the top-six contributors to generate output during 2020.

During the same period, Gbarain power plant accounted for the least share of output contributing 0.24 per cent.

Compared to 2019, the reliance on the aforementioned nine power plants increased by 4.54 percentage points as they only accounted for 67.26 per cent of total generation in 2019.

The NERC said it had commenced the process of gradually activating the industry contracts to provide certainty to the minimum volume of energy expected of each generating plant and properly allocate risks among the industry operators.

This, the Commission said, was expected to lead to incremental growth in power availability and utilisation.

During the year 2020, the available generation capacity of the 26 active plants stood at 6,107MW while the average generation was 4,054MWh, about 5.97 per cent higher than the generation level in 2019.

The industry recorded the highest daily peak generation of 5,520MWh on 30th October 2020.

Nigeria currently generates just a little over 4000MW despite promise to hit at least 5000MW from July 1..

Experts say the country needs at least 30, 000MW to reach sufficiency.

The NERC said complete resolutions of the technical and operational challenges in the Nigerian Electricity Supply Industry, NESI, remained a top priority.

“We are currently working to ensure that the Payment Assurance Facility for ensuring that GenCos honour their obligation to gas suppliers comes to an end. The Commission is finalising an Escrow Arrangement for the industry that will provide payment security for GenCos and gas suppliers pending full activation of contract obligations,” it said.

The average load factor across all plants stood at 61.74 per cent in 2020, indicating that an average power plant operating in the year 2020 had 61.74 per cent of its available capacity dispatched by the System Operator, SO. This represents a slight increase of 1.06 percentage points from the 60.68 per cent recorded in 2019.

Kanji, Jebba and Shiroro hydro plants, respectively, had 83.60 per cent, 78.73 per cent and 67.59 per cent of their available capacities dispatched by the SO and were respectively first, third and eight plants with the highest dispatch rates.

Thus, NERC said the dispatch rates of the three hydro plants complied with its Order NERC/182/2019, declaring hydropower plants as “must-run” by SO.

The Order was to ensure that hydro plants were efficiently dispatched, given their low tariffs and in consideration of safety associated with spilling of water from dams during the rainy season.

In 2020, Azura power plant had a load factor of 79.74 per cent while Sapele NIPP had the least dispatch rate of 33.71 per cent.

Chairman, Nigerian Electricity Regulatory Commission, Mr Sanusi Garba who disclosed this on Friday May 6, said the last tariff review was approved on December 31, 2021, and became effective in February this year.

Garba said; I want to, on behalf of the management of NERC, clearly state that as of today (Friday), we have not approved any rate review and there is no indication that any electricity distribution company is increasing its tariff. If you notice that the rate you buy electricity has changed within the last one to three weeks, we want evidence. The information posted on the NERC website was the last tariff rate review in December 2021.Our function is to approve applications for tariffs for the distribution companies, and we have not received any.We have clearly said that we have an obligation by law to do minor review every six months to take care of inflation, forex and so on.”

Commenting on issue of Eligible Customers Regulations, the Commissioner, Market Competition and Rates, NERC, Mr Musiliu Oseni, said the regulation and the framework were are still in place.

Oseni added that the commission issued a letter to the market operators to stop the recognition of certain potential customers.

Oseni further revealed that generators were already making moves to renegotiate the contracted capacity made with NBET to free some capacity to sell to eligible customers.

He said; “As of today, we have a few customers that have been approved as eligible customers pending the review of the necessary documentation of other customers.Some of the customers that are yet to secure approval have some challenges, which include the inability of their potential generators to sell additional capacity to them.Under that framework, many of the generators had a contract with the Nigeria Bulk Electricity Trading Company, and you cannot contract the same capacity twice.”

It also revealed that electricity tariffs were raised in February this year, and was quick to, however, state that the tariff payable by some customers in the franchise area of one of the distribution companies was reduced.

This came as power generation companies condemned the Nigerian Bulk Electricity Trading company, stating that the NBET was failing in its obligations in terms of payment for power generated by the Gencos.

Speaking at a press briefing in Abuja on the challenges in the power sector and other issues, the Chairman, NERC, Sanusi Garba, stated that subsidy on electricity was a policy issue of the Federal Government that had to be halted.

He said, “The role of the commission is to make a determination of the rates that consumers should pay. So we strike a balance between consumers and investors.

“Now subsidy is a policy issue determined by the government. The government will decide that the rates calculated or agreed by the regulator may at this time not be passed on to consumers. It has happened many times.

“In the past four, five years the level of subsidy has gradually been reduced, because you cannot run the electricity market on life support and say that investors cannot get their return on investment until government steps in to provide the required funding.”Garba added, “So that policy decision (stopping electricity subsidy) is as announced by the Minister of Finance. The subsidies have been, at one time as high as N600bn a year, and gradually coming down to about N30bn or so this year.”

On concerns about the rise in electricity tariffs, the NERC boss stated that the adjustment was made in February this year following some economic fundamentals considered by the commission.

“What happened on February 1, 2022, is a minor review of tariff. It is very clear on our website that every six months we will adjust rates to take care of the foreign exchange component of cost and also inflation,” he stated.

Garba described the tariff adjustment as absolutely straightforward, stressing that the distribution companies were meant to inform their customers of the changes.

On the recent blackouts and repeated collapse of the national electricity grid, the NERC chairman said the rupturing of gas pipelines by vandals and routine maintenance works on some power plants contributed to the instability of the country’s power system.

This was further buttressed by the Federal Ministry of Power in a statement issued in Abuja the media aide to the power minister, Sanusi Isa, where it stated that the national grid suffered double system collapse within two days due to so many factors

“The current energy crisis confronting some key sectors of the economy also contributed to the problems we are facing now in the power sector,” the statement read in part. It added, “We are where we are today also because of the increasing vandalism of pipelines that also supply gas to the power plants.

“This too is being resolved in collaboration with the relevant agencies. The NNPC and other gas suppliers are working relentlessly to restore gas supply for optimum power supply.”

It disclosed this in its notice of Minor and Extraordinary Review of Tariffs for Electricity Transmission and Distribution Companies, a development that might lead to a rise in the tariffs payable by electricity users.

The commission explained that the extraordinary tariff review was a result of changes in inflation, foreign exchange, gas prices, available generation capacity and capital expenditure.

It said, “Further to the above, the commission held series of public hearings and stakeholder consultations in the first quarter of 2020 on the Extraordinary Tariff Review Applications of the 11 electricity distribution companies to consider their respective five-year Performance Improvement Plans.”

In a statement released on the commission’s website and signed jointly by the Chairman of the Commission, Joseph Momoh, and the Commissioner for Legal, License & Compliance, Dafe Akpeneye, it was gathered that the order was issued to the 11 electricity distribution companies (DISCos) on December 31, 2019.

Ikeja electricity consumers who used to pay about N13.34 per kWh since under the 2015 MYTO when the last review was carried out will from January 1 this year pay N21.80 per kWh, same as their R2 counterparts. Residential (R2) and R3 consumers in Ikeja, who have been paying N13.34 and N26.5 per kWh since 2015, will now be paying N21.30 and N21.80 per kWh.

Commercial consumers (those who use their building as a factory for manufacturing goods) who have been paying between N20.45 and N27.20 per kWh since 2015 will now be paying between N37.39 and N47.09 per kWh.

Industrial customers, who have been paying between N20.95 and N27.22 per kWh in Abuja, will now be paying between N36.07 and N47.09 per kWh. In the special category, those who have been paying about N20.06 per kWh in Abuja since 2015, will now be paying about N35.74 per kWh.

The statement read in parts “The Federal Government’s updated Power Sector Recovery Program does not envisage an immediate increase in end-user tariffs until 1st April 2020 and a transition to full cost reflectivity by end of 2021. In the interim, the Federal Government has committed to funding the revenue gap arising from the difference between cost-reflective tariffs determined by the commission and the actual end-user tariffs payable by customers. All FGN intervention from the financing plan of the PSRP for funding tariff shortfall shall be applied through NBET and the market operator to ensure 100 percent settlement of invoices issued by market participants. Effectively, this order places a freeze on the tariffs of TCN and administrative charges until April 2020 at the rates applied in generating MO invoices for the period of January to October 2019.”