NERC delays electricity tariff review for fourth time

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    The implementation of the Multi-Yr Tariff Order (MYTO) framework for electrical energy pricing has once more been delayed for the fourth minor evaluation which happens each six months.

    Day by day Belief reviews that the tariff which ought to now be at a median of N51 per kilowatt hour (kWh) remains to be at N31.eight because the implementation of the critiques suffers delays.

    The sector regulator – the Nigerian Electrical energy Regulatory Fee (NERC) – had pegged the N31/kwh within the MYTO 2015 primarily based on some macroeconomic indices together with inflation, international alternate charges and energy technology outputs amongst others. The tariff was signed on December 18, 2015, and applied on February 1, 2016.

    It ought to have been reviewed with the end result applied by July 2016, with the fourth final result to be applied by January 2018. Nevertheless, final weekend, an official of NERC defined the implementation delays which ought to be at a median N51 per kWh, if it had been applied following the steep rise in macroeconomic indices.

    Some officers of the electrical energy Distribution Corporations’ (DisCos) part of the sector worth chain, at a session by NERC in September, have been involved about their inputs submission for no less than two MYTO critiques as they haven’t seen any consequence.

    Market loses N460bn to tariff shortfalls

    The Affiliation of Nigerian Electrical energy Distributors (ANED) mentioned in its newest report that the delays within the tariff critiques, their implementation and another inconsistencies have brought about the electrical energy market a shortfall of N460 billion.

    It mentioned the freeze on Residential prospects 2 (R2) tariff between January and June 2015; adjustments to tariff assumptions and different points brought about the N460bn tariff deficit from 2015 to December 2016.

    The breakdown reveals that the R2 buyer tariff freeze, removing of assortment losses from the tariff, although reinstated later, brought about N187bn shortfall.

    ANED mentioned in 2016, one other N277bn deficit occurred when NERC determined to work out a 10-year tariff plan from 2015 to 2024. One other N46bn ensuing from non-review of the tariff assumptions occurred within the two evaluation durations of 2016, it famous.

    With the 2 pending critiques for 2017, the group mentioned, the shortfall can be far above N52bn noting that the end result for the fourth evaluation ought to be applied on January 1, 2018, however the DisCos haven’t been referred to as by NERC to submit their inputs.

    The Director of Analysis and Advocacy for ANED, Mr Sunday Oduntan, informed Day by day Belief that the 11 DisCos can’t pay 100 per cent for the invoices of vitality and providers to the Nigeria Bulk Electrical energy Buying and selling Plc (NBET) and the Market Operator (MO) as a result of tariff shortfall.

    Most of the DisCos typically remit under 50 per cent of their bill figures for month-to-month vitality provided to them by the Technology Corporations (GenCos) by means of the Transmission Firm of Nigeria (TCN). “It’s tough to pay 100% for vitality after we promote the product for N31.58ok however purchase it as excessive as N68. There isn’t a method it can work,” Oduntan mentioned.

    [Daily Trust]

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