There are indications that consumers will pay more for electricity from December 1, 2014 when the new price of gas for generating power takes effect.

The Nigerian Electricity Regulatory Commission confirmed the development on Thursday in Abuja, noting that the $1 increase in gas price to power plants would become effective on December 1. The regulated price of gas for 2014 was $1.8 per million British thermal unit.

The commission stated this during its presentation during a meeting with industry stakeholders on the bi-annual minor review of the Multi Year Tariff Order-2.

Aside from the price of gas, NERC stated that other factors being considered before undertaking the tariff review included inflation, foreign exchange rate and power generation capacity.

The Vice Chairman, NERC, Mr. Mohammed Bello, said the upward review was necessary although Nigeria’s power situation had yet to improve.

He said, “From what I have seen in the initial report, not much has changed. The tariff review is a sensitive issue to the consumer who considers paying higher and not seeing improvement in electricity supply. But there is a general consensus that this is the way to go. By paying what is due this is how the power will begin to improve.”

Industry analysts and operators of power distribution and generation companies also stated that the increase in gas price by $1/mmbtu would warrant a rise in electricity bills.

According to them, the gas component in the power value chain is a major factor that cannot be ignored.

“I doubt if a rise in gas price by about 40 per cent per mmbtu won’t warrant a corresponding increase in tariffs considering the significance of gas to power plants in Nigeria. This is because most power plants in Nigeria today are gas-fired,” a chief executive with one of the Discos, who did not want his name published, said.

Explaining the rise in gas price while giving the presentation at the commission’s head office, Mr. Roland Achor from Tariffs and Rates, NERC, said gas prices had been regulated since the adoption of the MYTO in 2008.

He noted that the regulated prices were applied in the 2012-2016 price regime.

“However, the Federal Ministry of Petroleum Resources in collaboration with NERC has agreed to a gas price of $2.5/mmbtu and transport cost of $0.8 effective December 2014,” Achor added.

On the rate of inflation, he stated that what the commission received from the Central Bank of Nigeria showed a figure of 8.3 per cent as of September 30, 2014 while the inflation rate at last minor review was 7.8 per cent.

“However, MYTO-2 had an assumption of 13 per cent inflation rate and the effective rate is now 8.3 per cent,” he said.

Achor noted that the data received from the CBN and the Nigeria Bureau of Statistics showed an exchange rate of N154.75 to $1 as of September 30, 2014 while the figure for the last minor review was N158.57.

He said, “MYTO-2 was benchmarked at N178 to $1. It is however important to note that MYTO-2 also allows a charge of one per cent above the CBN rate to cover letter of credit and other bank charges. The effective exchange rate is now N156.29 to $1 over the next six months.”

The NERC official stated that data from the Systems Operations of the Transmission Company of Nigeria showed available generation on six months average ending September 30, 2014 was 3,675.41 megawatts.

He noted that the gross capacity was therefore estimated to be 5,556MW but the last available generation capacity was 3,424MW.

“Throughout the period from December 1, 2014 to May 31, 2015, the retail tariff will be based on generation of 3,675MW,” Achor said.


http://www.punchng.com/business/business-economy/electricity-consumers-to-pay-more-from-december-nerc/

Only in Nigeria you pay for the electricity you do not consume. Not even a thousand megawatts has been added to the national grid since this administration came into power yet nigerians pay outrageous bills for nothing.

2015 please come quick! Time to kick PDP out!!

Another one again after the bad news about the fuel subsidy Chaii Ebele Jonathan...... Diaries God oooo ooooooo!

I only wonder why Goodluck's bad luck decided to manifest now. It is well. I'm sure I aint paying that stoopid bill tho.

1. So what will happen when the exchange rate becomes low? will they bring down the price
2. They forgot that there will be a drop in electricity generation because of this, and we will continue to pay more for tariff and service charge
3. They are not the only company using this gas, so why the increment on their side

God help us in this country

Paying for darkness since 1960

Ebele please....let the poor masses breath for once!! Haba!! Your era is just too hard for the masses.

We'll surely survive.

jacabi:
We'll surely survive.

Amen

braine:
I only wonder why Goodluck's bad luck decided to manifest now. It is well. I'm sure I aint paying that stoopid bill tho.

If you don't pay no light for you

ducii:


If you don't pay no light for you

No wahala. We go survive.

NERC can do whatever they like am currently on HGIPP(Holy Ghost Independent Power Plant)!

Why is so much badluck trailing Goodluck We are paying too much already as it is! No wahala sha, they know we'll just rant, no solid reaction from consumers.

Power generation keeps revolving around the same range for years, but tarrif keeps soaring & soaring. We'll get there one day!

phlemzy:
Power generation keeps revolving around the same range for years, but tarrif keeps soaring & soaring. We'll get there one day!

Yea we would