- Adjustments to run through presidency, customers for policy decision, buy-in
- Average tariff dips from N26 to N23 per kilowatt hour
The Nigerian Electricity Regulatory Commission (NERC) and major stakeholders in Nigeria’s electricity sector; the distribution companies (Discos), generators (Gencos) and the Transmission Company of Nigeria (TCN) have begun the process of adjusting retail electricity tariff to reflect current economic realities as they affect Nigeria’s electricity market.
Subject to the conclusion of the tariff review, NERC and the operators are however expected to present the final tariff model to the Presidency and consumers of electricity in the country to secure their buy-in and also guide the new government in its future policy decisions in the sector.
The Multi Year Tariff Order (MYTO) methodology which the country’s electricity market operates with, provides for major and minor reviews.
However, minor reviews are to be carried out every six months to incorporate changes in inflation rate, foreign exchange rate, gas pricing and generation capacity into the retail tariff.
NERC said Tuesday at a consultation on the semi-annual minor review of MYTO-2.1 in Abuja, that depending on the outcome of the review exercise, the possibility of an upward or downward tariff review was still inconclusive, despite its indication that average retail tariff in the market has dropped from N26 to N23 per kilowatt hour (kwh).
The new indicators as shown at the meeting in the minor review include inflation rate of 8.3 per cent up from 7.8 per cent; exchange rate, N198.97 to the dollar, up from N166.18; energy sent out from stations 32,921GWH, up from 28,038GWh; revenue requirement N619 billion, up from N572billion; and average retail tariff N23.8 down from N26.8.