The Nigerian Electricity Regulatory Commission (NERC) has implemented the new electricity tariff in 11 distribution companies, which came into effect over the weekend.

This tariff hike comes as NERC integrates the fixed charge component in the adjusted Multi Year Tariff Order (MYTO), which was approved in December 2015, The Daily Trust reported.

Tariff hike: customer challenge

The Abuja Electricity Distribution Company (AEDC) has seen the tariff jump from N14.70 ($0.07) to N24.3 ($0.12) per kWh for residential customer classification (R2).

Electricity consumer, Ahmadu Sule, a cold room operator in Nyanya, Abuja, told The Daily Trusts that he used to pay around N5,600 ($28.1) a month for an estimated daily consumption of 12kWh. With the recent increase, he now expects to pay around N9,400 ($47.2).

Best step for sector

Last week, at a media briefing in Lagos, spokesman for the Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, said that the new tariff structure is the best thing to happen to the sector if it wants to achieve a market friendly and cost-reflective tariff.

According to Oduntan, the paid customer tariffs are divided between the various industry service providers that make up the Nigerian energy market. The power generation companies receive 60%, 11% goes to the Transmission Company of Nigeria (TCN), 25% goes to the distribution companies, and 4% goes to various other stakeholders.

He added that the new price adjustment would remain for the next two years with corresponding tariff reductions between the third and seventh year, The Daily Trust reported.

Remain transparent

[quote]According to the head of commercial at the Ikeja distribution company, Folake Soetan, the new payment structure will be implemented across the residential, commercial, industrial, special and street light categories in order to boost the capacity of distribution companies (discos).

Media reported that the Abuja, Ibadan, Jos, and Kano discos are already implementing the new tariff in accordance with the directive. Customers using prepaid meters will be the first to see the new adjustment as they purchase electricity tokens this week.

Those using estimated billing could only see the effects when they make their payment in March, The Daily Trust reported.

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Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.