Even though there is still a shortage of electricity nationwide, the Nigerian Electricity Regulatory Commission, or NERC, started a new assessment of electricity tariffs yesterday.
In the statement “Notice of Compliance in Respect of the Biannual Review of the Revenue Requirements of Licensees,” which included a notice of minor revision of the Multi Year Tariff Order (MYTO), the Commission disclosed this information.
Two weeks after the Commission announced the new power tariff rates that went into effect on February 1, 2022, the notice was sent.
Vanguard’s grid generation checks revealed that, as of yesterday at 4 p.m., 20 plants were producing 3,378 megawatts, even though the tariff increase was based on the operators’ improved performance.
NERC made it clear that a rate increase is not a guarantee of the review in a statement posted on its official website and signed by Engr. Sanusi Garba, its chairman.
“The Nigerian Electricity Regulatory Commission adopted the Multi-Year Tariff Order (MYTO) Methodology in accordance with the provisions of the Electric Power Sector Reform Act (EPSRA), outlining the basis and procedures for determining licensees’ revenue requirements and reviewing electricity tariffs in Nigeria,” the statement read.
In cases where industry parameters have diverged so much from those used in the operating tariffs that a review is urgently needed to preserve the electricity industry’s viability, the methodology allows for Minor Reviews (every six months), Major Reviews (every five years), and Extraordinary Reviews.
We want to be clear that higher rates are not always the outcome of these reviews. End-user tariffs may be reduced when the advantages of improved operating parameter efficiency for individual licensees outweigh the consequences of changes to macroeconomic parameters, as shown in some tariff classes under MYTO 2022.
In accordance with EPSRA and other relevant industry regulations, “this notice is issued to notify the public and industry stakeholders of the Commission’s intention to begin the procedures for the July 2022 Minor Review of MYTO 2022 to consider changes in relevant macroeconomic indices, generation capacity, and CAPEX required for evacuation and distribution of the available generation capacity in compliance with existing rules.”
