The New Electricity Tariffs From July 2015

The Nigerian Electricity Regulatory Commission, NERC, has issued new electricity tariffs that became effective for commercial and industrial consumers from 1 April 2015 and that would become effective for residential consumers from 1 July 2015. The new tariffs are in the Multi-Year Tariff Order, MYTO, 2.1 for the period 1 April 2015 to December 2018 and they replace the tariffs in MYTO 2 for the period 1 June 2012 to 31 May 2017.
The charges are in two parts, there is a fixed monthly charge and there is a charge for electricity consumption, the energy charge, which is measured in kiloWatt-hour, kWh. We give below the charges for residential consumers using single phase or three phase meters, category R2. Charges are given for four electricity distribution companies, DISCOs, namely Benin DISCO, Ibadan DISCO, Ikeja DISCO and Eko DISCO.

For Benin DISCO, the fixed monthly charge for residential R2 category is N750 in 2015, N900 in 2016, N1080 in 2017 and N1296 in 2018. The energy charge will rise from N12.54 per kWh to N18.46 per kWh, an increase of 47 per cent, on 1 July 2015. The energy charge will be N17.02 per kWh in 2016, N18.23 per kWh in 2017 and N15.23 per kWh in 2018. For Ibadan DISCO, the fixed monthly charge for residential R2 category is N625 in 2015, N750 in 2016, N900 in 2017 and N1,080 in 2018.

The energy charge will rise from N14.23 per kWh to N18.00 per kWh, an increase of 26 per cent, on 1 July 2015. The energy charge will be N17.36 per kWh in 2016, N19.60 per kWh in 2017 and N17.93 per kWh in 2018.

For Ikeja DISCO, the fixed monthly charge for residential R2 category is N750 in 2015, N900 in 2016, N1,080 in 2017 and N1,296 in 2018. The energy charge will rise from N13.61 kWh to N14.96 per kWh on 1 July 2015. The energy charge will be N14.50 per kWh in 2016, N13.88 per kWh in 2017 and N12.85 per kWh in 2018. For Eko DISCO, the fixed monthly charge for residential R2 category is N750 in 2015, N900 in 2016, N1,080 in 2017 and N1,296 in 2018.

The energy charge will rise from N12.87 per kWh to N18.75 per kWh, an increase of 45 per cent, on 1 July 2015. The energy charge will be N18.01 per kWh in 2016, N19.39 per kWh in 2017 and N16.42 per kWh in 2018. The new tariff increases reflect the repayments of loans granted to all the DISCOS by the Central Bank of Nigeria. The loans amount to N30.72 billion for Benin DISCO, N27.16 billion for Ibadan DISCO, N11.70 billion for Ikeja DISCO and N6.86 billion for Eko DISCO.

Interest charged on the loans is 11 per cent and repayments are to be made between 2016 and 2014. There are bound to be strong protests when these increases are implemented and this may be one of the reasons why NERC has finally accepted that the issuance of estimated bills by DISCOs must be swiftly brought to an end.

NERC has recently acknowledged that the DISCOs are not doing enough to provide meters for their unmetered customers. NERC indicated that although the Credited Advanced Payment for Meter Implementation, CAPMI, was introduced such that customers can provide DISCOs with funds for the acquisition of meters, the DISCOs have not shown enough commitment to providing their customers with meters.

NERC therefore proposes to issue an order stipulating the maximum amount any unmetered customer would pay to the DISCO that provides him/her electricity services. I believe that an estimated bill should not exceed 200kWh in a month and if the DISCO believes the customer uses more than 200kWh per month, the DISCO should as a priority provide the customer with a meter.