Adebayo Adelabu
Increase in electricity tariff for Band A customers temporal hardship – Adebayo Adelabu
The Minister of Power, Adebayo Adelabu, stated that the rise in electricity tariffs for Band A customers is a temporal hardship pending an increase in power sector output.
Adelabu, who said this during the sectorial briefing of the ministers in Abuja, said he is optimistic that the tariff will gradually drop as the country’s power sector increases its output.
He mentioned that the cost-reflective tariffs for the premium customers were to drive liquidity in the power sector that is suitable to drive investment in the country.
The minister stated that the tariff is similar to the initial price surge observed in the telecommunication sector, which eventually saw prices decrease over time.
“The electricity tariff might look expensive at the moment. But I’m optimistic that these tariffs will go down. We know how much we are buying sim cards when Telecom just came. We knew how much we were buying telephones.
“But gradually as we scale up in generation, transmission and distribution, these prices will also go down. It’s a temporary hardship that will lead to a permanent gain,” Adelabu said.
20 Hours Electricity Supply Guaranteed for 15% Customers
In addition, the Minister said for the first time in the country’s history, the power distribution companies (DisCos) can guarantee 20 hours of power supply for a minimum of 15% of customers under the Band A category.
According to Adelabu, no previous administration was able to ensure such a level of power supply to even 1% of customers as has been done currently.
He also highlighted that the government has facilitated enhanced service levels in the sector, as DisCos now quickly address customer complaints.
“In distribution, our DisCos are more responsive and active. Today, discos will send you information and update of power outages at a given period of time. Now, they have woken up to their responsibility because of improved regulatory oversights.
“For the first time in the history of Nigeria, we have what is called guaranteed improved service level.
“It might be for Band A today but no government has ever guaranteed 20 hours of supply not to even 1% of consumers. But to 15% of consumers, we said let us start from here.
“And we have guaranteed service level for Band A customers with the introduction of cost-reflective tariffs to that Band, a key liquidity condition suitable for driving investment,” Adelabu added.
What you should know
Nairemetrics had earlier reported that the Nigerian Electricity Regulatory Commission (NERC) increased the electricity tariff for customers under the Band A category from N66/kWh to N225.
Musliu Oseni, Vice Chairman of NERC, said that these customers account for 15% of the 12 million electricity consumers in the nation.
He further stated that due to the failure to meet the necessary electricity supply hours, the commission has moved some Band A customers to Band B.
Meanwhile, NERC subsequently confirmed the approval of 8.1% electricity tariff rate cut for customers under the Band A category for all power distribution companies in the country (DisCos).
The tariff cut from 225/kWh to 206.8/kWh, which represents approximately 8.1% reduction, is attributed to the relative appreciation of the Naira in the official foreign exchange window.
NERC said that the revision of the 2024 MYTO for Band A customers led to a reduction in tariffs for all discos.
