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Tuesday, December 22, 2015

Nigerian government hikes electricity tariffs; abolishes fixed charges

METER
The Nigerian Electricity Regulatory Commission has increased electricity tariffs, while removing fixed charges for all consumers.

The new tariffs were approved Sunday.

Henceforth, all electricity distribution companies are not to bill customers the fixed charge component, starting from the customers’ next round of billing, the regulator directed.

Fixed electricity charge is a component of the tariff consumers are made to pay monthly, separate from what they actually consume.

The controversial N750 fixed charge nationwide had generated intense controversy among consumers who described it as illegal.

The chairman of NERC, Sam Amadi, said that under the new tariff regime, electricity consumers would only pay for what they consume from month to month.

Mr. Amadi said the removal of the fixed charge component was in compliance with consumers’ demand for a just and fair pricing of electricity in the country.

“NERC had promised to address all the complaints against fixed charges through a regulatory process that promotes investments in the electricity industry without unfairly burdening electricity consumers. This is in line with NERC’s mandate to be fair in all its regulatory interventions,” he said.
Some customers will however pay more for electricity under the new regime of charges.

The NERC chairman said the objective of the new tariff was to “enable prudent consumers to save money on electricity bill as they can now control their consumption and not pay monthly fixed charges”.

The new rates show that residential consumers in houses, flats or residences with electricity lifeline of 50 kWh, classified as R1, would not be affected, as they would continue to pay N4 kWh for unit of electricity consumed.

However, residential customers, who use single and three-phase meters in the houses and residences and are classified R2 under the area covered by Abuja Electricity Distribution Company (AEDC), will now pay N23.51kWh against the old rate of N13.91 kWh.

They will not pay the N702 fixed charge again.

AEDC covers Niger, Kogi and Nasarawa states and the Federal Capital Territory.

Equally, their counterparts in Eko and Ikeja electricity distribution areas will no longer pay N750 fixed charges, but will pay N10 kWh and N8 kWh more respectively in their energy charges.

Consumers in the two zones, consisting residents in southern part of Lagos state and Agbara in Ogun state as well as northern segment of Lagos State are currently paying N12.87kWh and N13.61 kWh respectively.

Electricity consumers in Kaduna and Benin electricity areas will no longer pay N800 and N750 fixed charges, but will pay N11.05 kWh and N9.26 kWh more, respectively.
Their current charges are N16.90 kWh and N12.54 kWh.

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