Electricity consumers and the Distribution Companies (Discos) will now jointly determine electricity tariff to be paid by consumers the Nigerian Electricity Regulatory Commission (NERC) has said.
NERC chairman, Dr Sam Amadi, disclosed this yesterday in Abuja while briefing journalists shortly after the monthly meeting held with heads of the various companies in the electricity industry.
According to Amadi, the decision was informed by the need to ensure transparent determination of appropriate tariff payable by consumers.
He, however, noted that NERC would take up an independent umpire’s role in the process and review the propositions and indices presented by the distribution companies during and after the consultation with consumers before signing off the mutually agreed tariff to be used by the distribution companies.
He explained further that the initiative would put a restraint on undue and unreasonable tariff reviews because the Discos would know that they would have to confront consumers with tariff proposals.
“This also puts consumers in good knowledge of the operations of the Discos and we will have enlightened consumers so that they will know if they are truly being served well by the Discos,” he added.
The responsibility for tariff setting, which includes generating the data, he said, will squarely be that of the Discos because they know the actual cost of serving their customers, their customer profile and how those costs would be applied.
“We want them to interface more with their consumers because these are the people who will pay the tariff and they should be able to participate in deciding their rates,” Amadi stated.
This system, he said, also gives NERC a first check on what is coming, and so when the proposals are sent, NERC will further conduct a public consultation to determine the authenticity of such proposals.
The managing director of Ikeja Electricity Distribution Company (IKEDC), Abiodun Ajifowobaje, in his reaction, said it was an opportunity for distribution companies to transparently convince consumers on the need for cost reflective electricity tariff.
Ajifowobaje explained that passing the tariff through consumers would eliminate instances of disputes as was recently witnessed in the review of MYTO 2.1 by NERC.
“The good thing about the tariff regime now is that NERC has given us the power to go and prepare our own tariff and submit, and they will review it and approve where necessary,” he said.
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