Reps stand firm on equitable Electricity Tariff
Mercy Adi Abuja
The House of Representatives has said increase in electricity tariff in the country must be based on equity and follow due process.
The speaker made this assertion through his deputy Benjamin Kalu at an investigative hearing organised by the House Joint Committee the Joint Committees on Power, Commerce, National Planning and Economic Development and Delegated Legislation on electricity tariff increase.
The Speaker said it is imperative to engage in wider consultations with all relevant stakeholders before any tariff adjustments, stressing that this approach aligns with Section 33 of the Electricity Act 2024, which mandates an equitable and just electricity price regime.
He said the decision to increase tariff has not been well-received by Nigerians with several people including organized labour and industry experts voicing strong opposition to this decision.
He affirmed that the fears expressed by many are valid, “as we know, is not just a commodity; it is a lifeline for many households and businesses across our nation. Any significant rise in tariffs could have far-reaching consequences for our economy and the livelihoods of our people.
“As representatives of the Nigerian people, it is our duty to carefully consider the implications of such policies on our constituents’ well-being and livelihoods. Our goal is to ensure that any adjustments made to electricity tariffs are fair, equitable, and ultimately beneficial to all stakeholders involved.
“Therefore, it is essential that we carefully assess all factors before making any decisions that may affect the affordability and accessibility of electricity for our citizens. It is imperative that we engage in constructive dialogue to address these issues and ensure that any adjustments made are fair, transparent, and ultimately beneficial to all parties involved.
“We must strive to strike a balance that safeguards the interests of consumers while also enabling sustainable growth and development within the energy sector.”
Minister of Power, Mr Adebayo Adelabu who spoke at the public hearing, proclaimed that the introduction of Band A with a higher tariff has reduced electricity subsidy to N1 trillion from approximately N3 trillion.
Adelabu while highlighting the financial constraints faced by the Federal Government he explained that without an increase in electricity tariffs, the subsidy would have surged to nearly N3 trillion, a figure the government could not afford.
To prevent accumulating further debt, the ministry implemented a model where customers in Band A would pay higher tariffs to offset the subsidies.
He emphasised that even with the increased tariffs, the cost for consumers remains lower compared to the expenses incurred from using fuel and diesel.
He said, “We are still about the cheapest, even in sub-Saharan Africa, despite the tariff. Our neighbouring countries pay higher.
“So the price isn’t comparable. Band A is cheaper compared to other sources of generating power. It is almost 50 per cent cheaper to connect to Band A of the national grid than to run on fuel and diesel.
“So when we complain about the higher tariff, it is cheaper for any business to pay for a grid connection than to individually generate power.
Adelabu assured that President Bola Tinubu’s administration aims to improve the situation for Nigerians, stating, “We are out to make things better for Nigeria and to create industrial development through our local manufacturing, and energy is needed to do this.”
He reiterated that the increase in tariffs is intended to make life more affordable, not more difficult.
The chairman of the committee, Hon Victor Nwokolo said, Nwokolo said, that the power of a regulator to approve tariff increase has to be justified by evidence and logic that show that the reviewed tariff is equity based and allocated to different customer class according to the real costs of serving them.
He stated that, though the Nigeria Electricity Regulatory Commission ( NERC) has power to fix tariff, the agency must follow due process.
He enjoined stakeholders present at the hearing to make available to the committees necessary and truthful information.”We want to know the challenges the sector is facing and how we can support. We want to see how responsible each of you has discharged your responsibility under the law and the terms and conditions of your licenses.
He acknowledged that The Electricity Act authorises NERC to allow an operator to recover the costs of electricity supply. However, he said this recovery will be only after the operator has established that it has incurred the costs in a prudent manner. The regulator cannot impose a burden on customers to bear imprudent and unnecessary costs.
“We want to know how customers have been served and protected. We want to know whether the safeguards that the legislature wrote into the law was complied with in the recent approval of tariff review. We want to be able to tell the entire house that the regulator and the minister followed the law and global regulatory practice in approving the tariff review,” he also said.
