THE Federal government has assured Nigerians that the methodology for the future review of electricity tariffs will be made clear to customers to end the prevalent suspicion about them in the country.

At the residential quarterly business forum, in Abuja, Babatunde Fashola, minister of power, works and housing, said there were misunderstandings about electricity tariff issues by consumers, who do not really understand why tariffs should be cost- reflective.

He noted that the government has decided to make the processes simpler to enable consumers understand how the tariffs they pay for electricity consumption were arrived at as well as a justification for them.

According to Fashola, government has decided to work with the World Bank to create the Power Sector Recovery Programme because it needed the support of the bank to clear up existing operational challenges in the sector. “It is really a series of carefully thought out policies and actions that have emanated from government’s interactions with all the players in the industry, not only as a result of my monthly meetings but also meetings at the higher levels of government which have come as feedback to us as issues challenging the industry,” he said.

He said the programme was developed to activate and achieve the energy supplies needed to meet the economic objectives of the government which were articulated in its Economic Recovery and Growth Plan, ERGP. “We have developed this document in collaboration with the World Bank to whom we will be looking for support, not only in terms of technical areas, but also in particular the financial support they can offer to the government side and also to the few Operators that may need financing support from the Private Sector arm of the World Bank which is the IFC,” Fashola said.

The minister explained that the issues of the market debts, tariff and World Bank funding would be some of the big issues that the programme would take up. He also alleged that the reversal of the tariff in 2015 by the Nigerian Electricity Regulatory Commission, NERC, had partly contributed to the huge debts of the market. “You will all recall that at the time government directed that tariffs be reversed somebody was already producing power; somebody was producing gas, and somebody was transporting it. Who was going to carry that Can?”

He said the recovery programme would, solve those debts, and find a way to pay them or to restructure them in a way that restores viability back to the sector so that the operators can carry on with their business.

The federal government through NERC had on February 1, 2016, introduced the current electricity tariffs. It removed fixed changes and increased the energy charges. For instance, residential customer classification (R2) in Abuja Electricity Distribution Company, are paying increased charges of N9.60. Also, residential customers (R2 customers) in Eko and Ikeja electricity distribution areas pays N10 and N8 increase respectively in their energy charges. Similarly, Kaduna and Benin electricity consumers saw their energy charges increased by N11.05 and N9.26 respectively. While commercial customers’ classification C2 in Ibadan and Enugu Discos were increased by N12.08 and N13.35, respectively.

—  Aug 7, 2017 @ 01:00 GMT