TUC threatens showdown as NERC denies 50% hike, blames inflation

The Federal Government has again increased the electricity tariff payable by power consumers across the country.

Approval for the hike in tariff was given by the Nigerian Electricity Regulatory Commission, as the increase which varies, based on different consumer classes, took effect from January 1, 2021.

A few hours after the news of the tariff hike broke, the NERC issued a statement, denying a 50 per cent hike as had been reported in some circles (excluding THE PUNCH).

The regulatory agency blamed N2 to N4 adjustment in tariff on inflation and movement in foreign exchange rates.

However, the Trade Union Congress issued a stern warning, asking the Federal Government to revert to old electricity tariff or face the consequences of its action.

The NERC had announced the tariff hike in its December 2020 minor review of the Multi Year Tariff Order and Minimum Remittance Order obtained by our correspondent in Abuja on Tuesday.

The tariff increase is taking effect just two months after the government through NERC implemented a hike in November 2020, which saw widespread opposition.

The MYTO order containing the latest tariff hike, Order NERC/225/2020, was signed by the new Chairman of NERC, Sanusi Garba, and it supersedes the previous Order NERC/2028/2020.

Providing reasons for the latest tariff hike, the commission said it considered the 14.9 per cent inflation rate rise in November 2020 and foreign exchange of N379.4/$1 as of December 29, 2020.

Others were available generation capacity, the United States inflation rate of 1.22 per cent and the Capital Expenditure of the power firms before the tariff was raised.

The commission also stated that the new tariff would be effective till June 2021 while a Cost Reflective Tariff would be activated from July to December 2021.

The commission had stated last month that it was carrying out a review for another tariff, hence the latest order announcing an increase in the rates payable by consumers.

In September last year, the commission raised electricity tariff but this faced stiff opposition from the organised labour, as the unions threatened to embark on a nationwide strike.

After series of negotiations, the tariff was reduced based on consumer classes and the hours of power supply received by an electricity user.

On November 1, 2020, power distribution companies commenced the implementation of the revised electricity tariff that was jointly agreed upon by organised labour and the Federal Government.

Findings showed that in the latest MYTO review, some power users would pay as much as N12 extra as electricity tariff.

Ibadan Disco, for instance, had an end-user allowed tariff of N34.1 per kilowatt-hour in 2020, but this was increased to N46.5 for the period of January to June 2021.

It was further hiked to N57.1/kWh for July to December 2021, meaning that Ibadan Disco is allowed to collect this much from customers under its franchise areas

Tariff increased by only N4 –NERC

But in a public notice on the matter, the NERC stated that it only hiked the tariff of some selected classes of consumers.

It said, “The tariff for customers on service bands D and E (customers being served less than an average of 12hours of supply per day over a period of one month) remains frozen and subsidised in line with the policy direction of the Federal Government.

In compliance with the provisions of the Electric Power Sector Reform Act and the nation’s tariff methodology for biannual minor review, the rates for service bands A, B, C, D and E have been adjusted by N2 to N4 per kWhr to reflect the partial impact of inflation and movement in foreign exchange rates.”

The commission argued that it never hiked tariff by 50 per cent, adding that it remained committed to protecting electricity consumers from failure to deliver on committed service levels under the service-based tariff regime.

Revert to old price or face the consequences of your decision, TUC warns FG

However, the Trade Union Congress reprimanded the Federal Government over the hike in electricity tariffs announced on Tuesday.

It described the decision as ‘wicked’ and ‘another betrayal of trust’ coming in the middle of ongoing negotiations by the FG and the organised labour on the November 1, 2020 hike.

The union asked the government to revert to the old price or face the consequences of its decision.

This was contained in a statement by the TUC President, Quadri Olaleye, and the Secretary-General, Musa Lawal, titled, ‘Electricity hike: Another betrayal of trust’.

The congress wondered “why this government espouses unfriendly policies that are capable of crippling the economy.”

It said many companies which could not pay the previous tariff hikes had either closed shop or relocated to neighbouring countries.

The TUC stated, “Does it mean there is no other way this government can creatively generate revenue? It has become obvious that the outrages from the organised labour and the masses and the series of negotiations we had with the government were just cosmetic and hypocritical.

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