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NERC Approves Review of Electricity Tariff

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NERC Approves Review of Electricity Tariff

The Nigerian Electricity Regulatory Commission (NERC) has approved a minor review of electricity tariff for Ibadan Electricity Distribution Company (IBEDC), increasing electricity cost for consumers under the franchise area.

IBEDC franchise area includes Oyo, Ogun, Osun, Kwara and parts of Niger, Ekiti and Kogi states.

NERC in an order (NERC/225/2020) signed by its Chairman, Sanusi Garba and Commissioner Legal, Licensing and Compliance, Dafe Akpeneye on December 31, 2020, said the new tariff order took effect January 1, 2021 and will exist until a new order is made.

A copy of the order seen by Vanguard showed that the tariff increases will commence from July 1, 2021.

According to the order, tariff for customers in Band A (minimum supply of 20hrs daily) will increase by N6.85 to N69.18/kwh, a 10.98 percent rise.

Also from July 1, tariff for customers in Band B (minimum supply of 16hrs daily) will increase by 13.1 percent (N7.65) to N66.04/kwh from the present N58.9/kwh. For customers in Band C (minimum supply of 12hrs daily), the increase is 29.13 percent (N14.19) to N62.92/kwh).

The highest tariff increase will be for consumers in Band D (minimum supply of 8hrs daily) with 121.5 percent (N32.79) hike to N55.76/kwh from N26.97/kwh.

NERC explained that the review was necessary following changes in inflation rate, foreign exchange rate, available generation, gas price, collection losses from ministries, departments and agencies of government, and Capex adjustments.

On service improvement by the utility, NERC ordered that “IBEDC shall be liable for service improvements in accordance with commitments under its universal service obligations for providing electricity supply to customers.

“Subsequent retroactive review of IBEDC’s tariffs during Minor Tariff Reviews shall be based on the IBEDC’s MYTO load allocation of the grid total energy delivered to all DisCos in line with the vesting contract executed by IBEDC and NBET”.

The commission added that “where there is a failure to deliver on committed service level by IBEDC as measured over a period of 60 days, rates payable by all customers in the affected load cluster shall be retroactively adjusted in line with the quality of service delivered over the same period, upon verification by the Commission”

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