There are indications that electricity tariff may be raised around
mid-year as government considers options to revive the ailing power
sector by injecting $7.6 billion (about N2.4 trillion) in five years.
The details are contained in the Power Sector Recovery Plan (PSRP), a
document formulated in March by the Office of the Vice President and
the World Bank Group.
The Working Group for the implementation is being coordinated by the
SSA to the President on Power at the Office of the VP, Damilola
Ogunbiyi, and the Lead Energy Specialist at WBG, Kyran O’Sullivan.
According to the document the federal government plans to recover the
$7.6bn fund by way of hiking the present electricity tariff outlined
in the Multi-Year Tariff Order (MYTO) 2015.
It has therefore considered four options and the Working Group is
making a decision on which of the hike options to adopt shortly.
The first tariff hike option is to freeze tariffs for all classes of
electricity customers until July 2019. Although the present
administration may have left office then, government still believes
this decision will help it recover the N2.4trn ($7.6bn) it is sinking
into the sector from now to 2021.
Option B of the PSRP is to hike tariffs for all classes of customers
by January 2018. This it said will fetch about N1.7trn (about $5.4bn)
of the fund to be spent in the 5-year period. However, a balance of
$2.2bn (N697.4bn) may not be recovered within the period.
The third tariff hike option which is the most urgent is to increase
tariffs in July 2017 (two months from now). This decision if taken
will fetch the federal government about N1.3tr ($4.1bn) to support the
sector in the 5year period. Government may still have to contend with
recovering $3.5bn (N1.1trn) balance.
The fourth option is to hike tariffs by 50 per cent in July 2017 for
industrial customers only. The non-vulnerable residential and low
commercial customers will see the hike by January 2018 while the
vulnerable ones (customers in the lowest class) will see a hike by
July 2019. Government believes taking the decision could raise N2.3tr
($5.9bn), leaving a balance of $1.7bn (N538.9bn).
Meanwhile, the Nigerian Electricity Regulatory Commission has said
that the 198 days required for new buildings to be connected to
electricity will be reduced to 30 days.
This was part of the decisions at the 15th monthly meeting of the
Minister for Power, Works and Housing, Mr. Babatunde Fashola, with
operators of the power sector in Jos, Plateau State.
A communique issued at the end of the meeting said that NERC would
soon release a regulatory order to that effect.
It also reported that the 132kv lines from Makeri to Pankshin in
Plateau State to Okpella in Edo State were expected to be switched on
The communique said the Katampe 60 MVA substation had been restored,
while the 40 MVA mobile substations in Damboa in Borno State had also
been restored on May 7. It decried the lack of corporate governance by
Discos, which failed to provide audited accounts and improved