Electricity distribution companies of Nigeria, DisCos, have hinted that they want government subvention of they would require over 200 percent increase in electricity tariff to sustain the sector if the federal government does not intervene.
According to information gathered from PHCN sources, the operators said an intervention was needed to address over 800 billion Naira revenue shortfall.
They said the intervention can come in form of subsidies to consumers or provision of special access to foreign exchange for the operating companies.
Distributors say tariff may increase to between 70 Naira and 105 Naira per kilowatt from the average energy rate across the country which is N22. 8 kobo per kilowatt.
According to the Chief Executive Officer of the Association of Nigerian Electricity Distributors, Azu Obiaya, the debts owed power distribution companies by private electricity consumers, businesses and government authorities have increased to about N568 billion.
He said DisCos will be forced to increase tariffs if revenue shortfall persists.
He added that those debts are affecting the operations of the distribution companies and many are no longer able meet targets and services to consumers.
It was gathered that a new proposal for increment of electricity tariff has been sent to the Nigerian Electricity Regulatory Commission, NERC.
Recall that an electricity tariff approved by the NERC took effect in February, 2016. NERC also removed fixed electricity charges.
Recently, Group Leader Generation, Sahara Power Group, Engr. Michael Nzoigwe, said if care was not taken, the power business in Nigeria will shut down in six months’ time.
According to him, the power distribution companies who bought the power company, have lost their investments, as they have been unable to recoup their money.
“The Nigerian power system is presently in trouble and if care is not taken, the business will shut down in six months’ time. Quote me on this. This is because those in the business have lost their investments. They have invested billions and keep borrowing yet, their monies can’t be got back not to talk of making profit,” he said.
He said the power transmission business should be a competitive one.
“The Transmission business in Nigeria has to be competitive because at the moment, TCN has stopped improving and all they do is sit and collect rates,” he said.
Energy Strategist, and representative of the ECOWAS Regional Electricity Regulatory Agency, ERERA, Ifey Ikeonu, also said recently that Nigeria cannot satisfy everyone in terms of what consumers pay as electricity tariff.
According to her, electricity is a commodity which should be cost reflective and not a tool in the hands of politicians.
“Nigeria is a very good case of controversy when it comes to how much to pay for electricity-we hear lots of complain about increment in tariff. But tariff should be cost reflective if you really want to make profit. Electricity should not be a political tool because it is a commodity. That is why there is need for strong Regulatory bodies vested with the right power to enforce laws,” she said.

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