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Nairaland Forum / Nairaland / General / Politics / Power Firms Demand 200% Increase In Tariff (1766 Views)
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Power Firms Demand 200% Increase In Tariff by abdrazak: 12:31pm On Oct 23, 2016 |
There may be a fresh increase of over 200 per
cent in electricity tariff being paid by residential
consumers if a proposal by power distribution
companies to raise the average energy charge to
N105 per kilowatt-hour from the current rate of
22.8KWH is approved.
This is coming less than eight months after about
45 per cent increase in tariff was imposed on
electricity consumers nationwide. The power firms attributed their latest push for tariff increase to high inflation rate in the country, scarcity of foreign exchange, devaluation of the naira and the huge debts being owed them. Already, the Discos said they had hinted the Nigerian Electricity Regulatory Commission about the proposal but no action had been taken on it yet. The Chief Executive Officer, Association of Nigerian Electricity Distributors, an umbrella body for the Discos, Mr. Azu Obiaya, confirmed the latest agitation for tariff increase, in an interview with our correspondent, stressing that it was important to raise the tariff in order to remain in business and serve the people well. Azu said, “To review the tariff, we will be looking at an average rate of N70 per kilowatt-hour for residential consumers. But some Discos will like to have the rate as high as N105/kWh.” Each Disco has a fixed energy charge payable by its customers. The highest charge, according to documents obtained by our correspondent from NERC for the year 2016, is N32.26/KWH and this is payable by R2 consumers under the Jos Electricity Distribution Company. The lowest energy charge of N15.83/KWH is payable by R2 customers who get power from Ikeja Electricity Distribution Company. A further analysis shows that the average energy charge for all the 11 Discos is N22.8/KWH. But the Discos were said not to be comfortable with the current rate, as they argued that it was not cost reflective and was hampering the required expansion of infrastructure as well as the smooth flow of operations. Azu, who spoke to our correspondent on the sidelines of a power dialogue in Abuja on Thursday, said the debts owed power distribution companies by private homes, businesses and government ministries, departments and agencies post-privatisation amounted to N568bn. He also stated that one reason many Discos had not metered their customers was due to the huge debts owed them, as well as the tariff issue. This, he said, had hampered the operations of the different Discos, a development that had made it difficult for the companies to meet the funds remittances required of them by the Market Operator. Obiaya said, “Discos are experiencing revenue shortfall on a monthly basis of N38bn. As of June 2016, the MDAs owed the Discos N53bn post- privatisation. “The books of the Discos are so bad that they have no chance anymore to access finance. These books do not reflect the cash flow that is necessary for them to be taken seriously by any lender.” A senior official at NERC told our correspondent that although the Discos had been calling for an upward review in tariff, the regulator had not considered their demand. “The minor review of tariff is ongoing at present but NERC has yet to consider their plea for such increase in tariff, although the economic fundamentals in Nigeria have seriously changed and are now so high,” the official said. When contacted, the National Secretary, National Electricity Consumers Advocacy Network, Mr. Obong Eko, stated that NECAN would never support such move. He described the move as the peak of insensitivity to the flight of Nigerian masses. He said, “They’ve been flying the kite for some time now because the last time tariff review was done was when the exchange rate for one United States dollar was about N190. But now, one dollar is close to N500; and the price of gas in the international market has gone up too. “Despite all these, it will still be so unreasonable to come out to announce an increase in tariff now that Nigerians are going through severe suffering. Are they aware that people are dying of hunger? We can never support such move and we will resist it.” Source: http://www.punchng.com/power-firms-demand-200-increase-tariff/ 1 Like 1 Share |
Re: Power Firms Demand 200% Increase In Tariff by malele(m): 12:46pm On Oct 23, 2016 |
Useless country. Let me correct myself, wonderful country but filled with extremely useless leaders |
Re: Power Firms Demand 200% Increase In Tariff by 989900D: 12:47pm On Oct 23, 2016 |
the last time tariff review was done was when the exchange rate for one United States dollar was about N190. But now, one dollar is close to N500; and the price of gas in the international market has gone up too. Exchange rate is king! Something needs to be done about it as quickly as possible, or else, commensurate salary increase, which at this time is both undo-able and economic suicide on the other hand. |
Re: Power Firms Demand 200% Increase In Tariff by Nobody: 12:48pm On Oct 23, 2016 |
nawa o, as if d light situation will get better afterwards. please everyone, checkout my new blog, it's LUCCIVIEW.COM pleeeeeaaassse support me by jst checkn it out pls pls pls pls |
Re: Power Firms Demand 200% Increase In Tariff by TheFreeOne: 1:01pm On Oct 23, 2016 |
Whilst Nigerians are still groaning under current power tarriffs? Not only 200% they should come for our bloods. Make Dem kuku kill us all Na. Nonsense. 3 Likes |
Re: Power Firms Demand 200% Increase In Tariff by abdrazak: 1:05pm On Oct 23, 2016 |
malele: |
Re: Power Firms Demand 200% Increase In Tariff by abdrazak: 1:05pm On Oct 23, 2016 |
malele:Very Useless There is no light for the past three days in my community. They want to start charging #70 - 105 per uniit. 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by drss2(m): 1:07pm On Oct 23, 2016 |
d rate of poverty dat will increase as a result of increase in power tarrif under dis govt will shock economist all ova d world. 2 Likes |
Re: Power Firms Demand 200% Increase In Tariff by abdrazak: 1:09pm On Oct 23, 2016 |
989900D:Sincerely speaking. Exchange rate is gonna affect so many things if care is not taken. Salary is slashed by 50% while every commodities increases above 50% Its only God that can help us in this country 4 Likes |
Re: Power Firms Demand 200% Increase In Tariff by AZeD1(m): 1:12pm On Oct 23, 2016 |
abdrazak:This is a big lie. One of the most effective ways to collect tariff is via prepaid meters. The reason why customers have not been metered is because estimated billings favour the discos as they can charge for power not consumed. abdrazak:This is a fact but this is not a tariff issue but a management issue. Many of you guys didn't know what you were getting into. Y'all thought you were going to make a killing with little or no efforts. 2 Likes |
Re: Power Firms Demand 200% Increase In Tariff by SamuelAnyawu(m): 1:15pm On Oct 23, 2016 |
200% . Recession 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by Inspectahdeck(m): 1:21pm On Oct 23, 2016 |
Make them chop their power o. Nigeria a country where it's citizens pay for nothing These Crazy people (disco and genco etc.) will not plan on how to improve power instead we only hear of constant proposal to increase tariff. "He also stated that one reason many Discos had not metered their customers was due to the huge debts owed them, as well as the tariff issue". Can you imagine this statement from thieves 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by abdrazak: 1:22pm On Oct 23, 2016 |
AZeD1:I presumed that if customers were billed according to their power consumption, there won't be any ranting as it is. Someone was telling me that they were billed #5,495.65k for last month when they didn't even have light for a day. Cancelling of estimated billing would have been the best then giving out prepaid to customers as substitute. 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by abdrazak: 1:25pm On Oct 23, 2016 |
Inspectahdeck:That's why I didn't go with privatization. Disco, TCN and others are doing nothing to improve electricity supply. Same as before |
Re: Power Firms Demand 200% Increase In Tariff by mastermaestro(m): 1:29pm On Oct 23, 2016 |
Petrol price hike scenario reloading. Get ready to pay more for nothing, and to receive less for more labour. This government will strip you of your voice (freedom of speech), your economic power, and finally your reasoning ability. If you are doubting me...... 2 Likes
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Re: Power Firms Demand 200% Increase In Tariff by TheFreeOne: 1:44pm On Oct 23, 2016 |
abdrazak: The DISCOs are stalling rolling out prepaid meters cos estimated billing suits their criminal agenda of fleecing Nigerians. The last administration gave DISCOs about two years to supply every household prepaid meters but till now they failed and then ask current government for time again all in the bid to continue their fraudulent billings without commensurate light supply. And now they're talking increment again as if recouping their investment should be overnight or isn't it supposed to be long-term (HOW MUCH HAVE THEY EVEN INVESTED SO FAR ASIDE ACQUIRING THE DISCOs)? They better approach the FG and sort out whatever the problem is lest the people take out their frustrations on them and the FG. 2 Likes |
Re: Power Firms Demand 200% Increase In Tariff by Osyxcel(m): 1:58pm On Oct 23, 2016 |
If the current average rate is #22.8/KwH, then 200% increase would amount to #68.4/KwH. If it's to #105/KwH, that's a whooping 361%. Do these people think at all? 2 Likes |
Re: Power Firms Demand 200% Increase In Tariff by Nobody: 1:59pm On Oct 23, 2016 |
Nigerians will be complaining and more than 50% of Nigerians don't pay light bill. |
Re: Power Firms Demand 200% Increase In Tariff by dahaz(m): 2:07pm On Oct 23, 2016 |
This DISCOS are very funny. They have not invested anything into the system yet they still keep shouting 'tarrif review'. what have they been doing with all the money they collect as electricity bills and grants given to them by government?. Electricity industry is a long term investment that cant be recoup over night. 2 Likes |
Re: Power Firms Demand 200% Increase In Tariff by abdrazak: 2:09pm On Oct 23, 2016 |
charliboy654Why will they pay what they didn't consume? How did you expect this type of consumer that was billed #5,495.65k for last month to pay without light to pay? 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by abdrazak: 2:09pm On Oct 23, 2016 |
charliboy654:Why will they pay what they didn't consume? How did you expect this type of consumer that was billed #5,495.65k for last month to pay without light to pay? |
Re: Power Firms Demand 200% Increase In Tariff by Nobody: 4:31pm On Oct 23, 2016 |
#105 per Kwh? I guess it's high time to go completely off grid. It will absolutely make more sense to generate your power and sell to other willing consumers at a competitive price- what a way to go! 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by abdrazak: 8:13pm On Oct 23, 2016 |
Ayoolla:You have nailed it. |
Re: Power Firms Demand 200% Increase In Tariff by EternalTruths: 8:49pm On Oct 23, 2016 |
Chaiiiiiii hope Afonjas are enjoying the change. 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by abdrazak: 8:06am On Oct 24, 2016 |
EternalTruths:What are you insinuating? |
Re: Power Firms Demand 200% Increase In Tariff by PaulIdu: 8:43am On Oct 24, 2016 |
Same thing they said when they increased it over 50 percent months ago ..the current tariff is not even sustainable for most Nigerian and now the want more ..If the can't do it the should handover PHCN back to govt jare 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by ExInferis(m): 9:32am On Oct 24, 2016 |
AZeD1: You've no idea what you're talking about. Estimated does not favor Discos because of too many problems inherent with estimating energy consumption. Wrong consumer classification, under billing, etc add up to the ATC&C losses especially when historically billed consumers are the ones less likely to pay (being postpaid) AFTER consumption of energy while the Disco still has to pay the MO for this consumed but unpaid energy. That's why sometimes the bills are crazy: other consumers bear the cost of the defaulting ones. And herein is catch 22: any consumer feeling over billed will refuse to pay, thus leading to loss of both revenues. Metering is always preferred as it's prepay: your revenue comes BEFORE energy is consumed, and all consumers are placed on the proper tariff class. AZeD1: Nope. There is a great degree of material and data rot before the utilities were sold off to the Discos, and BPE gave the prospectors false data about the state of things. Three of the most fundamental problems are: 1. The transmission network is a shoddy mess. And it's still owned by government wholly. System collapses are a daily occurrence. Also, TCN sends energy indiscriminately even into remote or commercially non viable areas where no revenue can be recovered commensurate with the value of energy sent. To the Discos this is a major loss point since energy is a commodity like any other commercial product. There are also so many technical losses on the network occasioned by poor equipment. 2. The customer data from NEBSA is fraudulently inaccurate and incomplete, meaning Discos have to plough resources into customer discovery and enumeration. While this is ongoing, millions of hidden customers are siphoning free energy for which Discos have to bear the financial burden. 3. The tariffs are not cost reflective. Whether post or pre paid, the average tariff under MYTO 2 does not cater for the cost of the industry even if consumers pay 100%. It costs money to buy gas, generate energy, transmit it, distribute it, and pay all costs in the energy value chain. And even without the spiking exchange rate the tariffs are a poor revenue mechanism anyway. The BPE sold a turkey to the investors in its bid to rid itself of its albatross (fowl pun intended) NEPA, and lied and smoke screened to the buyers. Now Nerc expects the investors to pump money into the system from funds pulled out of thin air when the losses are mounting. Consumers expect 24hour electricity at cheap costs without a care to how much it takes to supply even an hour of energy. Also, consumers are resistant to the doctrine that electricity is a commodity; they prefer to see it as government subsidized service to which they are entitled. It always amuses me when someone would spend 20k on data and 10k on airtime, but wouldn't spend 2k on electricity. And he'll want to charge his phone all the time. 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by AZeD1(m): 12:30pm On Oct 24, 2016 |
ExInferis:I don't know what you are on but if metering favoured the discos, they'll have metered consumers since Also most of the owners didn't know what they were getting into, they just saw it as a way to make money without minding the technical challenges. |
Re: Power Firms Demand 200% Increase In Tariff by ExInferis(m): 12:44pm On Oct 24, 2016 |
AZeD1: Meters aren't free, are they? They're a substantial investment and no one is lending Discos any money while their revenue is shot to hell. And when the meters are somehow acquired, they've to be discounted to near zero purchase for customers. It'd take some time to recoup the investment. And that's without taking into account energy theft through Meter bypass. Metering is always the best for any utility company. As for the claim that most of the investors didn't know what they were getting into...well that's true. But it's only on account of the misleading info the BPE sold the buyers. They were under sold on the technical challenges. I'm an insider and I have investor friends. 1 Like |
Re: Power Firms Demand 200% Increase In Tariff by ImoRiver: 12:45pm On Oct 24, 2016 |
Otnutnu iho. They should better give us good service before any rise in tariffs. |
Re: Power Firms Demand 200% Increase In Tariff by ThumbzTNA(m): 12:53pm On Oct 24, 2016 |
rocket science 101 |
Re: Power Firms Demand 200% Increase In Tariff by AZeD1(m): 1:50pm On Oct 24, 2016 |
ExInferis:I'm not a novice in the power sector and I can tell you that if those guys had done due diligence, they would have known about most of the issues. 2) Metering in Nigeria doesn't favour the power companies. Every time a pipeline is vandalised, the power companies are supposed to lose money, but my bill stays the same or sometimes increases because I am given an estimated bill. |
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