Not Moved by What Consumers Say

Fri, Jul 19, 2013

By publisher

5 MIN READ

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Despite overwhelming rejection by consumers of the new increase in electricity tariff, Sam Amadi, chairman, Nigerian Electricity Regulatory Commission, says there is no going back

|  By Anayo Ezugwu  |  Jul. 29, 2013 @ 01:00 GMT

SINCE the introduction of prepaid meters in the country, electricity supply and billing has been a source of worry to many electricity consumers in Nigeria. The unprecedented increase in electricity tariff despite erratic power supply in the country and frequent system collapses is a nightmare to Nigerians.

On July 15, the Nigerian Electricity Regulatory Commission, NERC, announced the increase in fixed electricity charges, of the Multi Year Tariff Order, MYTO. The NERC said it has an approved tariff stipulated for 2012 to 2016. The MYTO, which was prepared by the NERC, showed that there would be increases in electricity tariff every year till 2016.

The tariff schedule showed that consumers would have to pay higher on two fronts. Every year, the fixed cost will go up. Similarly, the energy cost or cost per kilowatt of electricity will also go up. NERC had consistently said that increase in electricity tariff would be for the short run and that the amount payable by consumers would begin to fall when the country produces enough electricity.

The annual tariff increase would be automatic not minding whether there was appreciable improvement in power supply or not. Sam Amadi, chairman, NERC, following public outcry against the recent increase in the fixed charge from N500 to N700 or N800, depending on the location, said, the tariff must increase despite shortfalls in service delivery. He argued that the inability of power distribution companies to live up to expectation was not a tenable reason to slash tariff, adding that it was in the interest of Nigerians not to reduce the charges.

Amadi said most of the shortcomings in the sector were structural and insisted that the commission would not reverse itself on the approved tariff regardless of the underperformances of power distribution companies. “We regret that the distribution companies have not been very committed to meeting their obligations in the MYTO. NERC recognises that the quality of service has not seen significant improvement, especially in the area of metering and accurate billing of customers. Our expectation for significant and sustained improvement in electricity supply and quality service lies in the expected takeover by the privatisation preferred bidders, who have better incentives and commitment, and have made enforceable promises to invest continuously in providing better services to consumers. These investments and commensurate improvements will not all be made in one day but over the coming months, years and decades following the entry of new investors and managers of our distribution companies.”

The Nigeria Labour Congress has condemned the new tariff designed by NERC. Abdulwaheed Omar, president of NLC, said the body rejected the latest figures because of the epileptic electricity supply and the low purchasing power of the working people. He predicted the congress rejection of the new tariff on government’s failure to check power supply in the country.

He said the multi-year tariff structure as designed by the NERC, which was tacitly approved by government, only protects the interest of investors in the electricity sector and has little or no consideration for consumers, most of whom are poor and incapable of paying. “If anything, electricity service delivery has plummeted over the years with consumers being compelled to pay exorbitant tariffs for incompetence, poor services and fraud. Access charge, which was N225 the previous year, has been arbitrarily increased to over N700. This review, whether done suddenly or in advance, is without justification or rationale and stands condemned as it will negate whatever gains expected to be recorded by the much-vaunted reform in the power sector,” he said.

Meanwhile, electricity consumers in Lagos have condemned the delay by the Power Holding Company of Nigeria, PHCN, in installing meters in several houses more than two years after payment. Ibrahim Opeloyeru, a resident of Diamond Estate, Agege, said that consumers who paid for the prepaid meters waited for long, before getting them. He said PHCN’s excuse was that the meters were not available. He alleged that some officials of the PHCN were deliberately hoarding the meters in order to continue placing customers on estimated bills. He said that some residents of the estate waited for two years after payment before their pre-paid meters were installed.

Emenike Orji, a businessman at Ikotun, Lagos, said it took him two years after payment before he could get the new prepaid meter system. “I paid N50,000 for a three-phase unit, which I intended to use for my office, but I had to wait for over two years before I eventually got the unit. It was as if I would never get it when my bills became exorbitant. It was affecting my business because I still had to fuel the generator since power was not regular,” he said.

According to him, the long period he waited to get the meter made him to be inquisitive in knowing why people who paid after him received theirs faster than him. “Because of the delay, I was curious. I wanted to know why some other people got theirs as soon as they paid. Hence, I did my homework when I was going to pay for the one in my house. Somebody introduced me to a staff of the PHCN who requested for N15,000 in addition to N25,000, which is the official cost of a single-phase  unit to fast track the process. I had to pay the money because I needed it as soon as possible. On payment, he promised to deliver the meter to me in a month. But it was actually delivered in three weeks.”