By Ihuoma Chiedozie, Abuja
Published: Thursday, 1 May 2008


President Umaru Yar’Adua on Wednesday approved a new tariff for electricity consumption in the country.

[img]http://www.punchng.com/images/January/Tuesday/pix200801292205545.jpg
[/img]
President Umaru Yar‘Adua

The implementation of the new tariff, under a Multi-Year-Tariff Order, will commence on July 1, 2008.

However, the Federal Government will pay the difference between the new tariff and the current one for the next three years on behalf of consumers.

The government will establish an MYTO Support Fund in which the difference (subsidy) in the new cost and the current one will be paid into from July 2008 to July 2011.

The Federal Executive Council has already okayed N64.84bn as subsidy for electricity consumption for 2008/2009.

It is expected that the government will provide an additional N77.41bn and N35.80bn as subsidies for 2009/2010 and 2010/2011 respectively.

Under the MYTO, government intends to rapidly develop the power sector through increased returns on capital investment and correct pricing of electricity.

Yar’Adua gave approval to the MYTO after a presentation by the Nigerian Electricity Regulatory Commission at a Federal Executive Council meeting in Abuja on Wednesday.

The new price regime was however not stated by the Special Adviser to the President on Communications, Mr. Olusegun Adeniyi, who briefed journalists after the FEC meeting.

The current electricity price regime is between N4 and N6 per kilowatt hour for single phase consumers.

For individual users, it is between N6 and N8 kwh and N8 and N12 kwh for maximum demand users.

Adeniyi said, “The Yar’Adua Administration today took a major step towards attracting required investment for the rapid development of Nigeria ’s power supply sector with the approval by the Federal Executive Council of the implementation of a new Multi-Year Tariff Order with effect from July 1, 2008.

“The introduction of the MYTO is expected to boost the confidence of lenders and investors alike in Nigeria’s power sector as it provides for reasonable returns on capital investment, and the correct pricing of power which will, in concert with other measures being adopted by the Yar’Adua Administration, facilitate an orderly transition to a much more efficient and reliable market-oriented power-supply system.

“The MYTO developed by the Nigerian Electricity Regulatory Commission is predicated on the quantification of the total revenue requirements of all power industry participants.

“In approving its gradual implementation, the Federal Government recognised that correct pricing for the commercial viability of Nigeria ’s power industry was of critical importance to the urgent resolution of the twin problems of inadequate and unreliable electricity supply.

“It is expected that with the full implementation of the MYTO, the current situation in which the power industry is unable to generate enough revenue to cover its operating costs, undertake regular maintenance and make new investments, will become a thing of the past.

“The President had at his meeting with State Governors yesterday (Tuesday) tabled and received the governors’ consent for a new funding regime that will provide for the massive injection of funds for the rapid expansion of Nigeria ’s power generation, transmission and distribution infrastructure.

“President Yar’Adua remains fully and constantly engaged with the resolution of Nigeria ’s power supply problems.

“He wishes to reassure all Nigerians that his Administration is doing everything possible to ensure that stable power is achieved within the tenure of his Administration.”

“It is expected that with the full implementation of the MYTO, the current situation in which the power industry is unable to generate enough revenue to cover its operating costs, undertake regular maintenance and make new investments, will become a thing of the past.

“He wishes to reassure all Nigerians that his Administration is doing everything possible to ensure that stable power is achieved within the tenure of his Administration.”

Kobojunkie:

By Ihuoma Chiedozie, Abuja
Published: Thursday, 1 May 2008


President Umaru Yar’Adua on Wednesday approved a new tariff for electricity consumption in the country.



The implementation of the new tariff, under a Multi-Year-Tariff Order, will commence on July 1, 2008.

However, the Federal Government will pay the difference between the new tariff and the current one for the next three years on behalf of consumers.

The government will establish an MYTO Support Fund in which the difference (subsidy) in the new cost and the current one will be paid into from July 2008 to July 2011.

The Federal Executive Council has already okayed N64.84bn as subsidy for electricity consumption for 2008/2009.

It is expected that the government will provide an additional N77.41bn and N35.80bn as subsidies for 2009/2010 and 2010/2011 respectively.

Sky Blue:

@cola, to be honest at this point i am just glad to know that Yaradua is not a corpse and can instigate his own ideas. However this whole thing is based on the assumption that NEPA is not corrupt and all the money people pay in bills actually goes to NEPA. Now this is simply not true! Does NEPA read your
meter before they charge you? Because a lot of the times they don't read meters and the people writing up the bill write it up when they get to your house and the bills are actually inflated. Then part of the money is simply split by some officials and there have been very wide spread reports about this going on. This is just a segment that capsulates yet another corrupt Nigerian agency so will increasing the bill change this significantly? |


Privatisation is needed in the power sector because then when people vote with their feet due to competition then power providers would have to improve the quality of their services. NEPA has fought so doggedly against privatisation because they know the implications of it and there will be no more avenue for looting.

Sky Blue:


I really do believe one way to go is for the government to provide some of the infrastructure for power supply and sell it off to competent companies

oziomatv:

But why can't Nigerian Govt. look into solar energy as an alternative instead of repeating old style method that has never worked since Independence?

Tonim:

good point oziomatv, but you know we have abundant gas reserves (actually more than oil).

I don't know about the cost effectiveness of using gas for power vs. solar energy

cola:

Guys here have always suggested a GSM-revolution like case for the power sector. Now the govt is trying to do something in that line, same guys are here complaining.

oziomatv:

How long will gas and oil last before the whiteman wave it out like coal?
We Nigerians should be a little bit advance in thinking and making future plans.
We can't be running behind others, We should be running along side or even ahead to meet up.


Govt. should invest on solar energy rather than all these failed method they're using.

ufofex:

Before the GSM revolution, we had NITEL. Govt. did not have to pay subsidies for us to recharge our GSM phones, govt. did not take part in the pricing, not even with the PTOs. Market forces/competition played their role, and those who could afford it got it. We didn't need govt. subsidies and we sure don't need it now. Even if electrcity is charged at #10 per unit, it will still be far less a price to pay when you compare it to howmuch we use to run our generators.

Subsidies or no subsidies, govt. should create an enabling environment that will allow for true private sector/investors participation in the power sector, and leave the pricing for market forces to determine.

olrotimi:

@cola, whateva text book xplanation you give wouldnt be sold easily.lets know what we are paying for, and let power be stable at least to an extent.