High Tariffs Without Service


Nigerian Electricity Regulatory Commission gets federal government’s approval for yearly increase in electricity tariffs up to 2016 regardless of the quality of service delivery

By Anayo Ezugwu  |  Sep. 23, 2013 @ 01:00 GMT

THE current hike in service charge and tariff by the Power Holding Company of Nigeria, PHCN, is causing untold hardship to the consumers. Besides, the Nigerian Electricity Regulatory Commission, NERC, has secured the approval of the federal government to increase electricity tariff annually between 2012 and 2016, whether or not there is an improvement in electricity supply.

According to the NERC, electricity consumers will have to pay more money on two fronts each year. This is in respect of fixed cost and energy cost, or cost per kilowatt of electricity consumed. Already, the fixed charge has gone up from N500 to N700 or N800 in some cases. What is stunning about the hike is that as far as those in charge of electricity are concerned, there is no need for correlation between service delivery and increase in tariff.

While defending the current hike in tariff, Sam Amadi, NERC chairman, said that the inability of power distribution companies to live up to expectations on service delivery was not enough reason to bring down electricity tariff. He further explained that most of the shortcomings in the power sector were structural, noting that expectations for significant and sustained improvement in electricity supply and quality service lies in the expected takeover of  the privatised companies by preferred bidders.

Meanwhile, consumers in Lagos have pleaded that the relevant authorities should delay the increased fixed rate electricity tariffs until the government is able to put in place mechanisms to ensure regular and uninterrupted electricity supply. Kuti Titilayo, a consumer in Lagos, said the increment in the PHCN charges has only brought undeserved hardship to Nigerians. She said that power supply in this country has continued to deteriorate despite the billions of naira expended to improve the sector.

According to her, accurate measurement and effective pricing do not reflect in the management of the PHCN. “The supply and use of electricity services fall under economics of scale. What we need is accountability in power supply especially from the PHCN officials. For instance, there are some houses in the rural areas without meters, yet they receive bills at the end of the month. The question is, where is that money going to and how did they arrive at the bill? Again, the disconnection and reconnection fee collected by the PHCN officials has no receipt. I will like to see the PHCN accounts some day,” she said. She noted that the federal government should accelerate the entire generation and distribution capacity of the power sector in order to ensure adequate and reliable power supply to stimulate economic recovery and development of the country.

Odubela Olawunmi, a consumer in Lagos, said the PHCN is not helping the economy of Nigeria. It was even better when it was called National Electric Power Authority, NEPA. Then, people enjoyed low charges like N1200 as monthly charge and stable electricity. Supply has been worse since the emergence of PHCN; what we now have are high charges without regular supply. “Presently, most areas of Lagos State are in total darkness. Some areas in Lagos even operate on two-day-on and a day off. The electricity supply is less than six hours on a daily basis and at the end of the month the least bill is N7000 for what I did not use. As a good citizen of this country, I pay my tax in order that the government can provide social amenities but the reverse is the case. The epileptic power supply is affecting small scale businesses in my area. Many shop owners have abandoned their shops since they cannot afford the use of generators all the time, and landlords are left with vacant shops. To make matters worse, armed robbers have also capitalised on this darkness to operate almost every night. This alone is saddening. After spending the day hustling, you return home to observe vigil for fear of being attacked,” he said.

Femi Akinyemi, a civil engineer, said he cannot pay charges that are equal to his house rent to the PHCN. I cannot imagine paying a bill that is almost the same with my house rent. In fact, I still wonder if Mowe, Ogun state, is still in the map of Nigeria. Here, transformers are in short supply. Even when there is power supply, most part of the environs will not have electricity or they have a low voltage. I suggest that the government works on this and forget about increasing charges,” he said.

One thought on “High Tariffs Without Service

  1. My dear, an Igbo adage says that “one cannot put two hands in one mouth”. Nigerian Electricity Regulatory Commission are putting two hands in one mouth at the same time. Often, because they are buoyant, they do not fill the pinch of high tariff and all the excruciating hidden charges thereon.
    The tendency in this Nation is to promulgate laws and regulations without considering the low income earners. Personally, I do not understand what they meant by that N650.00 monthly charges. You go to the station with N3,000. to recharge, you go home with less than a month’s unit of what you were getting! . Please, they should remove that monthly charges and let electricity be like GSM recharge cards. I am saying this in their interest. Because I know that very soon, people must start looking for cheaper source of energy. For sure, it will be like hand-sets that everybody is carrying about today.
    A woman who has a solar freezer with a solar powered bore-hole will someday arrange for a solar or winds energy to power the entire house. Please, they should remove that monthly charges and leave the tariff the way it is now. It is only a Shylock who will keep increasing the rents every year without due consideration.
    Finally, if they insist on this unnecessary monthly charges, we will pray God to give us a cheaper source of energy. It is Koin that says that “Time changes yesterday”. We cannot be enslaved for ever!

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