Tariff Hike for 11 Discos in 2024
The Nigerian Electricity Regulatory Commission (NERC) has approved new electricity tariffs for the 11 distribution companies (DisCos) in Nigeria, with effect from January 2024.
The NERC chairman, Sanusi Garba, disclosed this on January 17. he assured that customers would continue to pay the current tariffs as the Federal Government would subsidise the new tariffs to the tune of N1.6 trillion throughout the year.
The NERC also approved a monthly tariff review of the DisCos, arising from changes in the inflation rates, Naira/US dollar exchange rates, and gas-to-power prices. Before now, the Multi-Year Tariff Order (MYTO) allowed for bi-annual minor tariff reviews while major tariff reviews were planned every five years.
According to him, the new tariff contains what the DisCos are allowed to charge based on government policy if they are to remain in service.
A breakdown of the approved tariffs indicates that the cost-reflective tariff for
- Abuja Electricity Distribution Company: the cost reflective is N120.88 per kilowatt hour (kwh). However, a tariff of N63.24/kWh is allowed by NERC, indicating a shortfall of N58.12/kWh, which the Federal Government subsidises.
With this policy, the estimated subsidy benefit for customers under the Abuja Electricity Distribution Companies (AEDC) franchise in 2024 is approximately N233.26 billion, which translates to N19.44 billion monthly.
- Ikeja Electric: The cost-reflective tariff is N128.18 while the approved tariff is N56.6, leaving a shortfall of N53.5/kWh-(Kilowatts means a measure of thousand watts of electrical power)
With this policy, the estimated subsidy benefit for customers under the Ikeja Electric franchise in 2024 is approximately N238.201 billion (N19.85 billion monthly)
- Ibadan: The estimated subsidy benefit for customers under the Ibadan DisCo franchise in 2024 is approximately N199.841 billion (that is, N16.65 billion monthly).
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