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FG increases Electricity Tariff by 50%, Effective January 1, 2021



By Ezekiel Kagbala FPR

The Nigerian Electricity Regulatory Commission, NERC, has approved over 50 per cent hike in electricity tariff effective January 1, 2021.

The new tarrif hike regime is to be paid by customers of the 11 electricity Distribution Companies, DISCOs.

This is coming just two months after the Commission forced implementation of much opposed hike on Nigerians in November 2020.

In a revised Multi Year Tariff Order (MYTO) signed by the new Chairman of NERC, Engr. Sanusi Garba, on December 30, 2020, the new tariff increase took effect on January 1, 2021, and supersedes the previous Order NERC/2028/2020.

In the new Order NERC/225/2020, the commission said it considered the 14.9% inflation rate rise in November 2020, foreign exchange of N379.4/$1 as of December 29, 2020, available generation capacity, US inflation rate of 1.22% and the Capital Expenditure (CAPEX) of the power firms to raise the tariff.

The revised Service Based Tariff (SBT) also saw increase in the rates payable by all classes of electricity users unlike the one of November 2020, that exempted low power getters.

This is effective till June 2021 while a Cost Reflective Tariff (CRT) expected to raise the new cost higher will be activated from June to December 2021, the NERC Order revealed.

Recall NERC earlier in December, 2020, notified that it had begun a review for another tariff, which has been completed and had taken effect from January 1, 2021.

NERC had raised tariff for the DISCOs in September but that drew outrages from customers and the organised labour, prompting the Federal Government to suspend it to pave ways for parties to dialogue.

Subsequently, by November 1, 2020, the suspended tariff was implemented after some discounts were given for customers who get 12 hours and above power supply daily.
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