Economic Stress: IBEDC, AEDC, Other Discos Commence Electricity Tariff Hike July 1

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By Kolawole Ojebisi

Barring a last-minute reconsideration of their decision, the electricity distribution companies, particularly those in the southwest, in Nigeria will welcome their teeming customers to the month of July with a hike in electricity tariff.

According to the message put out on its verified twitter handle, the Abuja Electricity Distribution Company(AEDC)has increased electricity tariff which will be effective from Wednesday July 1st, 2020.

The message, however, added that the increase in tariff will be executed “piecemeal” as not all customers will be immediately affected

“In this new tariff, there will be a marginal increase in the cost of electricity per kwhbut is not ALL CUSTOMERS that will be immediately affected.

The electricity distribution company (AEDC) attributed the hike principally to the decision to provide improved service to their customers.

“The principal benefit of this new tariff is to, among other things, ensure improved service to our esteemed customers with longer hours of power.”

“The new tariff will also help us in the long run to recoup more funds for greater improvement in power supply to our customers.”

The news coming from Ibadan Electricity Distribution Company (IBEDC) is not in anyway cheering too. As the company too, has concluded plan to increase its tariff too.
Though the purpose for the increase was couched in a more detailed expression.

The IBEDC says the tariff review is part of its plans and effort to deliver what it described as “excellent services” to its customers.

The Chief Operating Officer (COO) of the distribution company, Mr. John Ayodele, in a release issued Thursday, said the tax review is imperative for the company’s tariff to be in line with current economic realities as well as ensure the financial and fiscal sustainability of the company in the Nigerian power sector.

He assured customers that the new tariff regime will ensure that those who enjoy more supply will pay more than those who have lesser access, while appealing for the support and understanding of its customers.

According to him, “The objective of the review is to ensure that IBEDC adjusts its tariff in line with the current economic realities. This is required to meet the new Performance Improvement Plans (PIP) for Electricity Distribution Companies in Nigeria, as well as to achieve financial and fiscal sustainability in the Nigerian power sector.

“In order to provide more efficient and reliable service to customers, cost-reflective tariffs are required to cover the cost of critical investment in infrastructures and other parameters necessary for improved service delivery. This new tariff design is based on quantity of power supplied as customers will only pay based on availability of supply.

“For example, the tariff design is based on the service delivery, such that those receiving 20hrs supply daily will pay more than those getting 10hrs.”

Ayodele also explained that the company is very mindful of the challenging economic situation occasioned by the global pandemic Covid-19, but the macroeconomic facts of rising inflation rates and a volatile foreign exchange market compelled the implementation of the new tariff design.

“The tariff review is to reflect macroeconomic indices in Nigeria and the global harsh economic realities facing the power sector.

With this tariff, the company amongst other things will be in a better position to roll out more meters, upgrade aging infrastructure and be more responsive to the complaints of customers. We appeal for the understanding and cooperation of our esteemed customers as we are poised to serve you better,” he said.

Recall the IBEDC, of the 11 discos, has the largest franchise in Nigeria; the company is responsible for electricity distribution in Oyo, Ogun, Osun, Kwara and parts of Niger, Ekiti and Kogi. The disco has over 1.7 million customers.

The Ikeja Electricity Distribution Company has made a public announcement to the effect that a similiar review of tarrif will take effect from July 1, 2020 as well.

Recall that the New Diplomat had reported how the dicos have told the Nigerian Electricity Regulatory Commission (NERC) that the 2021 target set for them for the metering of all customers is infeasible.

According to the information on the website of the NERC it is the responsibility of the discos, among others, to provide meters to their customers.
“All customers have a right to a properly installed and functional meter.” the information read.

In 2018 the NERC introduced the Meter Asset Providers(MAP) regulation to new investors in the power sector to fast-track the roll-out of meters thorough the engagement of third-party investors and the end estimated billing regime.

However, according to the NERC’s latest report, only 3.9 million of the registered 10.3 million subscribers in the country have prepaid meters.

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Hamilton Nwosa is an experienced, and committed communication, business, administrative, data and research specialist . His deep knowledge of the intersection between communication, business, data, and journalism are quite profound. His passion for professional excellence remains the guiding principle of his work, and in the course of his career spanning sectors such as administration, tourism, business management, communication and journalism, Hamilton has won key awards. He is a delightful writer, researcher and data analyst. He loves team-work, problem-solving, organizational management, communication strategy, and enjoys travelling. He can be reached at: hamilton_68@yahoo.com

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