No Plan to Increase Electricity Tariff – ANED

THE Association of Nigerian Electricity Distributors, ANED, yesterday refuted reports of moves to increase electricity tariff by 200 per cent. Chief Executive Officer, ANED, Azu Obiaya said that with the present economic recession it will be unreasonable for the Distribution Companies (DISCOs) to increase electricity tariff.  This came as the association lamented a continued rise in liquidity deficit which may hit N809.8billion by end of this year, against N383.2 billion recorded in December 2015.
Addressing what it termed false speculation on tariff hike, Obiaya said: “I did not say we are going to increase the tariff 200 per cent but what I said was because of the changes that have occurred – recent inflation has gone up, the Naira has been devalued by almost three times, the gas pipeline vandalisation has resulted in a drop of power generation.  But, we have not written such letter on tariff increase to Nigerian Electricity Regulatory Commission, NERC
Electricity consumption

“There has to be recognition of something we all have to partner on. We don’t believe any reasonable person at this time will ask the consumers to pay more in terms of electricity consumption given the recession. “So since there are only two parties who meet their obligations to electricity supplied, government or the consumers, we believe the government needs to step in now and vigorously play a role. “The minor review [on tariffs] typically occurs in June and every six months, so the process of the minor review has been ongoing and is moving into its completion. The other issues of shortfalls of cash reflective tariff have been out there.

“There is an increased cost of electricity production, and there is the need for the increased cost to be addressed. It will make the tariff cost reflective, and ease the entire value chain from revenue shortfalls now.  The cost of power now is at N1.00 per kilowatt per hour, but the industry is collecting only 60 kobo per kilowatt hour.  There is a difference of 40 kobo that needs to be addressed.”

He also urged the government to step in with sustainable measures to rescue Discos out of the current challenges they find themselves in while providing electricity services to consumers in the country. According to him, ANED does not believe that the tariff has been cost reflective, because the current Multi -Year Tariff Order (MYTO) 2015 assumption was N194 to the Dollar, though at the Central Bank of Nigeria, CBN’s rate is currently N364 to the Dollar.  Inflation was nine per cent as against the current 17.9 per cent.  In addition, the generation assumption under this new tariff is supposed to be over 5000 megawatts, but current generation averages between 3500 and 4000 megawatts. In addition, he said that ANED has accumulated N53 billion of  MDA’s (Ministries, Departments and Agencies) debt, which has remained unpaid for by the government, and as a result of all of these issues the association owes the GENCOs.

Source: Vanguard

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