Lagos, -  Dr Sam Amadi, Chairman of  Nigeria Electricity Regulation Commission (NERC), says electricity consumers should expect tariff review by June  this year.

Amadi disclosed this in a paper at the Business Environment Roundtable organised by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos on Thursday. The roundtable had the theme “Private Sector Perspective on Power Sector Reforms”. Amadi  said  that the commission had already started the methodology, valuation and cost analysis to ascertain the actual price per wattage in the new regime. Amadi said that he could not specify whether the tariff would be reviewed downward or upward.

“I cannot say because it is not magic, but through adequate mathematic calculation,’ he said. According to him, the commission would send out the findings by April after the elections and conduct a public hearing to hear stakeholders’ input to the regime. He said that such sensitisation would also enable the stakeholders to understand the formula used in arriving at the new tariff. “What is of paramount importance to the government and an average Nigerian is how to have adequate power supply,’’ he said.

Amadi said that consumers and investors would be better off with the new tariff regime at the end of the day. He said that the development would also encourage investors to invest in the power sector. “The tariff regime, by law ought to be carried out in 2013; it was brought forward because of the ongoing reforms.

Mr Abimbola Onafowokan, a participant at the programme, said that most of the feasibility studies for the reforms had no local content because they werer done abroad. He said that the major challenge facing the reforms was the uncertainty of gas pricing and which could erode the benefits of the reforms if not effectively. (NAN)

http://www.vanguardngr.com/2011/03/consumers-to-get-new-electricity-tariff-soon-nerc/

Another terrific article: http://234next.com/csp/cms/sites/Next/Home/5534749-146/story.csp

Key quote, for me:

Demand and supply

Demand considerably dwarfs supply, resulting in the idle power generation capacities in the country at presentt. Gas utilisation is a challenge, as a result of various factors such as the lack of necessary gas gathering and distribution infrastructure, violence in the Niger Delta often resulting in pipelines vandalism and related environmental issues.

The International Oil Companies (IOCs), who are the primary producers of associated gas, want a commercial price for gas supplied to the domestic market, that matches international prices.

But the government sees gas as a national asset, hence wants it to be priced low, especially for the power sector, in an attempt to keep the retail electricity price low. Since the LNG prices are more attractive, the IOCs have an incentive to divert gas to the high end export markets as much as they can. And since they do not have an incentive to supply for the domestic market, they flare the rest.

Ewah Otu Eleri, a director at the International Centre for Energy, Environment & Development (ICEED), said, “This should be part of a national process of confronting the challenges of gas flaring. The regulation of the industry is clear: the Department of Petroleum Resources (DPR) is in charge of setting these standards. However, broader issues such as pricing, investments in gas gathering, and distribution infrastructure, etc. are part of a complex web that demands greater leadership.”

If the FG would let the oil companies sell NG locally at close to international prices, then:
A) Plenty of NG to power Nigeria's power plants
B) Less flaring of gas

I don't want to say to Nigeria's electricity problems are simple, but they are not hard. Tell the FG to stop setting the price of NG for power generation. Let the oil companies sell gas to PHCN and independent power projects at market prices. And then tell the FG to stop interfering with the price that PHCN sells electricity for.

Do these two things and you largely fix the electricity problem in Nigeria, imo.

^^

You are right but the main issue will be how much is the consumer willingly to pay for electricity or government will subsidize it at the end of the day?.