CITING misinformation, the Nigerian Electricity Regulatory Commission (NERC) yesterday came down hard on the Presidential Task Force on Power (PTFP) for its recent pronouncement that 'real cost' of electricity tariff would be down by 65 per cent.
In a veiled reference to the statement by PTFP, the Commission assured that no decision had been taken on how the tariffs would look like, "contrary to speculative reports making the rounds in some print media."
Chairman of NERC, Mr. Sam Amadi, who gave the clarification in Abuja, stressed that only NERC had the powers to make pronouncement on tariffs and quoting the Electric Power Sector Reform (EPSR) Act 2005, he recalled that the Commission had the sole mandate to regulate the Nigeria electricity supply industry and take decisions on tariff.
According to NERC: "The EPSR Act 2005 mandates NERC to among others, set end user electricity tariffs. To this end, the Commission utilises the Multi-Year Tariff Order (MYTO) as a methodology in arriving at cost reflective tariffs. The MYTO makes provision for minor and major reviews, which are conducted regularly. MYTO came into effect in 2008 and a major review was initially due in 2013.
NERC has however brought forward the major review from 2013 to 2011 in order to incorporate other sources of electricity generation and take account of recent major economic and national policy development.
"The MYTO review involves a number of stages that are currently ongoing such as data collection from relevant agencies, valuation of existing industry assets and liabilities as well as consultations with various stakeholders. These critical regulatory processes are ongoing. NERC expects that these processes will culminate in the publication of a new MYTO by the beginning of second quarter 2011. It is, therefore, presumptuous at this time to suggest what the tariff will be."
It added: "The general public is urged to ignore conflicting statements, whether intended or misconstrued, made in the media relating to electricity tariffs. NERC is quite happy to entertain any inquiries on this issue."
The PTFP on Sunday announced that the new tariffs that would be announced in April 2011 and would attract new capacity to the power sector, thus significantly reducing the electricity cost of businesses and individuals, prices of goods and the rate of inflation in the country.
A statement from the PTFP noted that: "Independent and informed analysis of retail tariffs in a reformed market for electric power in Nigeria indicate that average cost-based tariff will fall between N21 and N23 per kilowatt-hour (kWh), that is, about a third of what Nigerians actually pay for electricity. The new tariff will be announced by the NERC, an independent agency that is responsible for setting electricity prices, in April 2011."
Giving further breakdown, Chairman, Communications Committee of the PTFP, Abimbola Agboluaje, stressed that the: "Analysis of the reduction in the price Nigerians pay for electricity does not use the universally subsidised tariff as a reference; this is regarded as a 'nominal' price. Rather it is based on the 'real cost' which, majority of Nigerians really pay to consume electric power during the 60 to 70 per cent of the time when public power supply is unavailable at the subsidised tariff."
As the reform of the power sector proceeds, according to him, it is critical that Nigerians understand that neither the Federal Government nor electric power companies will determine electricity tariffs. He was optimistic that under the reform, poor people in urban and rural areas, who have fewer appliances to power, would enjoy much lower 'lifeline tariffs'.
The PTFP however emphasized that this task was exclusively the mandate the NERC, which he insisted was a wholly independent agency.
NERC refutes report on electricity tariff (http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=35359:nerc-refutes-report-on-electricity-tariff&catid=1:national&Itemid=559)