Residents of Oyo State will pay more for electricity consumption as from January 1, 2020.
A new tariff approved by the Nigerian Electricity Regulatory Commission (NERC) for the electricity distribution companies(DisCos) in the country, revealed that electricity consumers under Ibadan DisCo (IBEDC) will pay an increase of N9.1/kwh on the current charge of N30.6/kWh.
The NERC, which made this known in a publication tagged ‘2016-2018 minor review of the 2015 multi-year tariff order’ (MYTO) for each DisCo, said “the commission shall make necessary adjustments to reflect actual values at the time of the next minor review that will take effect on 1 January 2020.”
The DisCos in 2018 had complained that they were incurring huge losses as they were buying electricity at N80.88/kwh and selling to consumers at N31.50/kwh, recording a shortfall of N49.38/kwh.
They claimed at the time that the major challenge in the sector was lack of cost-reflective tariff, which they said had also prevented them from investing in their networks.
According to NERC, “the objectives of this order are to reflect the impact of changes in the ‘Minor Review’ variables for the period 2016 – 2018 to determine the cost-reflective tariffs for the relevant years; and to ascertain revenue shortfalls in view of the differential between such tariffs and allowed tariffs in the Nigerian Electricity Supply Industry (“NESI”).
“Determine and recognise the historical (2015 2018) tariff deficits pursuant to the objective of resolving the impairment of the financial records of DisCos arising as a consequence of the deficits.”
It pointed out that “this order has taken into consideration the actual changes in relevant macroeconomic variables and available generation capacity in updating the operating MYTO 2015 Tariff Order for the period January 1, 2016, to December 31, 2018, in line with the provisions of the MYTO Methodology (Amended).
A breakdown of the allowed tariffs approved for IBEDC shows that the end-user(consumers) for 2019, 2020 and 2021 per kwh are N30.6, N39.7 and N44.2 respectively.
This means that in 2020, Ibadan DisCo customers will pay an increase of N9.1/kwh on the current tariff of N30.6/kwh and in 2021, electricity consumers under the company will pay N13.6/kwh on their current charges.