House Investigates Increased Electricity Tariff

SAN FRANCISCO, December 11, (THEWILL) -  The House of Representatives Wednesday mandated its Committee on Power to investigate the actual cost of service charge that electricity consumers are expected to pay monthly so as to determine  if Nigerian consumers are being over charged by the distribution companies (DISCOs). This followed the passage of a motion on the 'need to investigate the recent increase in service charge by the DISCOs. Chairman of the committee, Hon. Hassan Saleh, observed that the service charges in question had already been reviewed upward by the Federal Government through the Nigerian Electricity Regulatory Commission (NERC) prior to the transfer of the unbundled Power Holding Company of Nigeria (PHCN) to the core investors. Saleh specifically expressed concern that the reviewed service charges have been doubled by the DISCOs in recent times even as customers are yet to get value for their money. According to him, 'The upward review of the service charge to N750.00 as part of the tariff that consumers are expected to pay is to encourage the new companies that were bidding for these distribution companies, particularly, to enable break even. 'Following complaints against the upward review of the amount being paid as service charge, NERC appealed to Nigerians for understanding given that the review was to encourage and create an enabling business environment for the new companies that would be taking over the functions of distribution of power. 'Recently, these power distribution companies unilaterally further reviewed the service charge to the sum of N1,500.00, and are still canvassing for further upward review, even though their services are at its lowest point presently as there are no substantial improvement in power supply, as customers are getting little value for their money,' Saleh explained. However, while denying giving approval to the DISCOs to effect any increase in electricity tariffs or charges, NERC chairman,Sam Amadi, explained that the DISCOs do not have a uniform tariff. 'We want to make it clear that NERC has not sanctioned any illegal increase by any DISCO. However, customers who feel that they are victims of such purported increases should come forward with evidence. NERC will in turn send out a team to investigate. 'The new owners of the recently privatised utility companies cannot unilaterally increase electricity tariffs and charges without the express approval of the regulator (NERC). Companies who want to charge more for their services must apply for a rate review. Once this application is received by the commission, a thorough and transparent process of stakeholder engagement follows. 'This involves consultation with civil society organisations, consumer groups etc., before any rate review becomes conclusive and official. It is important to state also that different DISCOs have different tariffs. This is due to their peculiar cost profiles, which in turn affects the cost of the service they provide. All these details are available in the full Multi Year Tarrif Order (MYTO) schedule on our website. 'The commission routinely carries out monitoring exercises to verify that the utility companies are following the tariff order to the letter and that there are no excesses or abuse of customers in terms of service delivery. Customers are also encouraged to report instances of such excesses or abuse to the commission, which will in turn intervene with the DISCO to ensure speedy resolution,' he said. By Saint Mugaga in Abuja