The Nigerian Electricity Regulatory Commission (NERC) says the newly approved tariff is expected to reduce subsidies for the 2024 fiscal year by about N1.14 trillion.
The Vice Chairman of NERC, Musliu Oseni, said this in a statement in Abuja on Wednesday.
”With the newly approved tariffs, subsidies for the 2024 fiscal year are expected to reduce by about NGN1.14 trillion in furtherance of the Federal Government’s realignment of the subsidy regime,” he said.
Oseni said that the federal government had indicated a transition in policy direction towards introducing a more targeted subsidy regime aimed at mitigating the impact of changes in macroeconomic parameters “while largely protecting vulnerable customers and fostering investments targeted at providing efficient service delivery in the Nigerian Electricity Supply Industry (NESI).”
According to him, the commission conducted a thorough review of the tariff applications submitted by the 11 Electricity Distribution Companies (DisCos) in line with the processes established in its regulations and business rules.
”The overarching objective of the commission in the consideration of the tariff application is the creation of a financially sustainable electricity market providing adequate and reliable power supply to drive the Nigerian economy.
”The commission, upon due consideration of the tariff applications, has approved revised rates affecting only customers classified under Band A category, which is about 15 percent of the customer population,” he said.
Oseni said that empirical service data had confirmed that this class of customers had truly received the committed level of service.
He said that under the revised tariff order issued by the NERC, DisCos were under an obligation to provide customers classified under the Band A service category a minimum average supply of 20 hours a day measured over one week.
”All other customers under the Band B to E service category, representing 85 percent of the customer population, will not be affected by the current review of end-user tariffs.
”All DisCos have been provided with mandatory targets for investments and migration of more customers to Band A.
”The commission has established a robust monitoring framework leveraging technology to ensure that the public has visibility of the service covenant with their service providers,” he said.
Oseni said that an enforcement and compensation mechanism had also been established in the event of service failure.
”We wish to assure all Nigerians that the commission, working in collaboration with policymakers, remains committed to providing adequate and reliable electricity to all citizens.
”This is as we work diligently with state governments to deliver on the gains of the Electricity Act 2023,” he said.