TCN Wants Upward Review of Tariff

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Mohammed Wakil, minister of power for state

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The Transmission Company of Nigeria is asking the federal government to review upward its tariffs to enable it remain in business and serve the country better

| By Anayo Ezugwu | May 4, 2015 @ 01:00 GMT |

IN LESS than one month after the Nigerian Electricity Regulatory Commission, NERC, gave the electricity distribution companies in the country permission to fix electricity tariff, the Transmission Company of Nigeria, TCN, also wants an upward review of its charges for transmitting electricity from generation points to distribution points in Nigeria. The TCN has applied to the NERC to review its tariff upward to accommodate extant expenditure incurred by it in transmitting power.

In making the request to NERC, TCN claimed that a number of significant changes have taken place or are expected within the years 2015 and 2016 since Multi Year Tariff Order (MYTO-2) were determined three years ago. The TCN’s requests for the review of its cost components came in from three of its separate but interdependent departments, the Transmission Service Provider, TSP, System Operations, SO, and Market Operations, MO.

The request was made to cover their expenditure in areas such as network/capital expenditure component, operation and transmission losses. Parts of TCN’s expected expenditure include replacement and renovation of its aviation department, which it claimed was almost moribund from poor maintenance and scarcity of funds.

For instance, TCN said it plans to spend $23,294,118 to purchase two new helicopters (including mission role equipment and training) for monitoring the integrity and security of the 330kv/132kv network of its transmission lines. It also plans to spend $1,811,765 to construct an aircraft maintenance hangar incorporating office accommodation plus workshop (hydraulic, electrics, and avionics) tools and equipment.

But by virtue of Section 76 (6) of the Electric Power Sector Reform, EPSR, Act 2005 and of all other powers enabling it to adopt the MYTO methodology for electricity pricing in Nigeria, and which sets out the basis and pricing principles and procedures for affecting minor and major review, the NERC has put out the request for consultation by industry stakeholders.

NERC has developed and published a consultation paper on TCN’s request, which will be open for comments for 28 days before any review in line with review processes. The commission by this measure, seeks to attract transparent public comment on the request, thus critiquing TCN’s request and ensuring that due process is applied in review of the tariff.

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