Electricity Tariff Increase: The Monopoly, Ineptitude and Misery

On February 1, 2016, the Nigerian Electricity Regulation Commission (NERC) approved a nationwide implementation of a 45% increase in electricity tariff. To this effect, an average Nigerian family will spend an additional 10-15% of their precarious income on paying for mostly unconsumed electricity.

For avoidance of doubt, the Multi-Year-Tariff-Order (MYTO), which allows for intermittent electricity tariff increase in Nigeria over a 4-year period was designed to attract investors into the nation’s power sector by guaranteeing return on investment (RoI) through periodic tariff increase.

This tariff order was predicated to work on two cardinal principles; that there will be improved, verifiable service delivery from the power distribution companies (DISCOs), in this instance availability of electricity; and metering of over 40 million consumers most of whom are currently billed by estimation - an obnoxious practice fraught with arbitrariness, extortion and fraud.

The Nigerian Senate did make attempts to prevent the tariff increase it described as “ultra-wicked and unconscionable”, and later, when it became effective, ordered its immediate reversal. However, NERC insisted on its constitutional duties as it affects tariff increase with its former boss, Dr. Sam Amadi, describing the senate order as ‘A direct infringement on the independence of the executive arm of government’.

Next, the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), both umbrella bodies of hardworking and long suffering Nigerian workers, intervened with threats to shut down the economy if the tariff increase is not reversed. This time, the Federal Ministry of Power lent its voice to the ‘rights’ of NERC to increase electricity tariff based on the Multi-Year-Tariff-Order - a ‘right’ to inflict hardship on Nigerians? To date, the tariff increase has not been reversed, and long-suffering Nigerians have, yet again been subjected to bear the brunt of adverse government policies.

It is instructive to note that while NERC in the past 8 years has enforced almost 400% increase in cost of electricity (N6.31/Kwh in 2008 to an average of N24.27/Kwh in 2016); there has hardly been a commensurate increase in income or steady power availability for the Nigerian people within the same period.

The National Association of Seadogs, Pyrates Confraternity, is worried that the Federal Government which through its Ministry of Power and NERC, has not effectively compelled the DISCOs to improve both electricity supply and ensure a significant metering of the Nigerian consumers, who continue to be defrauded of their hard earned incomes through estimated billing, is now forcing them to pay more for electricity through tariff hikes.

This practice cannot continue unchallenged!

The continuous, blanket approval government and its agencies grant the electricity companies to increase tariff without commensurate increase in service delivery and meter penetration is tacit reintroduction of the power monopoly, which kept the industry comatose for many decades, the estimated billing system which allows DISCOs to summarily divide up their revenue targets amongst hapless Nigerian consumers and the use of state coercive force to extract payments is tantamount to repression with the potential of courting civil disobedience or recourse to legal redress.

The February 1, 2016 electricity tariff increase needs to be reversed forthwith. A stakeholders’ round table should be organised immediately to find practical and acceptable solutions to the protracted challenge of electricity shortage. The legislature must also rise to its responsibility of defending the social and economic rights of Nigerians. The Senate of the Federal Republic should not allow a regulatory agency and its business partners to flagrantly discard its resolution.

The National Association of Seadogs, at the risk of sounding trite, wishes to underscore the indispensability of the Nigerian people whose interests every tier and arm of Nigerian government must strive to serve via its policies. This remains the indivisible minimum expectation.

The Consumer Protection Council must stand with the Nigerian electricity consumer at this time. The duty of the Council ironically should not stop at just ensuring that Nigerians get value for money in purchasing Power Generators, Solar Power Systems and/or Inverters which sadly, we have had to provide for ourselves in the search for steady electricity supply, but ensure that according to article No.4 of Decree 66 of 1992 that setup the body, “consumers interest receives due consideration at appropriate time and to provide redress to obnoxious practices or the unscrupulous exploitation of consumers by companies, firms, trade associations or individuals”.

Every government exists to serve its people. No less.

As citizens, we must all remain eternally vigilant to guarantee our freedom and development as a nation.

Prince Ifeanyi Onochie
NAS Cap’n
National Association of Seadogs (Pyrates Confraternity)
March 2016