In a reply
to the Nigeria Labour Congress’ (NLC) condemnation of the new tariff system by the Nigerian Electricity Regulatory Commission (NERC), NERC Chairman, Dr. Sam
Amadi has stated that the Multi Year Tariff Order (MYTO-2) was fair, reasonable
and necessary to guarantee continuous improvement in electricity supply to
Nigerians.
Dr. Sam
Amadi at a joint media briefing with its Commissioner for Market Competition
and Rates, Eyo Ekpo, in Abuja claimed that the NERC initiated MYTO-2 after wide
consultations with extant socio-economic stakeholders, including the NLC.
He also
questioned the reason NLC is condemning the tariff plan explaining that it was
designed and executed with maximum accountability and full participation of
relevant stakeholders, several public hearings and consultation across major
Nigerian cities to afford inclusive participation in the tariff setting
process.
He expressed
dismay at why the Nigeria Labour Congress would point fingers of accusation at
NERC despite the fact that a comprehensive consultation on the tariff was
initiated with the leadership of NLC in Jos, Plateau State.
He said: “As
a responsible regulator, we are committed to respond to the concerns raised by
consumers in print and electronic media and through social media. We consider
it of utmost importance to always explain to the consumers that the tariffs
they pay are fair, reasonable and necessary to guarantee continuous improvement
in electricity supply to Nigerian homes and businesses.
“NERC wants
to make it clear that since 1st June, 2012 when the second edition of MYTO came
into force, it has conducted two minor reviews which were published as required
by law.”
“A minor
review under MYTO involves an examination of interest rates, exchange rates,
inflation rates and available generation capacity during the preceding six
months and if these report a change of plus or minus five percent individually,
such change will be applied to the tariff published for each distribution
company.
“The two
reviews did not result in any increase of tariff because the indices and
fundamentals of the MYTO have not significantly changed. The changes that some
customers have belatedly noticed in their bills were announced by the
commission on June 1, 2012; it is not true that the tariff was designed to suit
investors alone, the NLC in any way participated alongside several civil
societies organization in the tariff consultation,” he added.
He stressed
that the fixed charge is a component of electricity tariff all over the world,
which is done to recover some of the capital costs for producing and supplying
electricity.
“In
designing the fixed charge, NERC ensured that very poor consumers on R1 are not
charged fixed charges and that most of the residential consumers are
subsidized. The fact is that the current N700 fixed charge for R2 customers
actually recovers only a small fraction of the actual fixed cost of supply. So,
it is not right to say that there is arbitrary increase, the tariff is in line
with the laws,” he said.
He advised
that NLC should petition it if there is any shortcoming of the tariff instead
of making accusations. He also apologized for distribution companies’ inability
to meet up to their obligations.
“We regret
that the distribution companies have not been very committed to meeting their
obligations in the MYTO.
“NERC recognizes
that the quality of service has not been significant improvement especially in
the area of metering and accurate billing of customers. We have responded to
regulations to enforce correct billing of unmetered customers and the new CAPMI
metering policy.”
If NLC was
part of the consultation process, why would they come out now to criticize NERC’s
decision? There is a part of it that does not add up. It’s not as if NERC
followed the recommendations of every party they consulted…
Via THISDAY
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Tariff is fair: NERC responds to NLC