By Obas Esiedesa, Abuja
The Forum of Commissioners for Power and Energy in Nigeria (FOCPEN) has expressed support for the recent order by the Enugu Electricity Regulatory Commission (EERC) reducing electricity tariff for Band A customers from N209/kWh to N160/kWh.
In a statement jointly signed by the Chairman of the Forum and Commissioner for Power and Renewable Energy in Cross River State, Prince Eka Williams, and its Secretary, Barr. Omale Omale, who is also the Commissioner for Power, Renewable Energy and Transport in Benue State, FOCPEN said the EERC’s decision was consistent with the Constitution of the Federal Republic of Nigeria, the Electricity Act 2023, and relevant laws and regulations of Enugu State.
“These legal frameworks empower States to regulate their intra-state electricity markets, including determine and implement electricity tariffs within their jurisdiction, which are fair to electricity consumers and sufficient to allow licensees recover their operating expenses and investments”.
FOCPEN also clarified that the EERC’s “tariff order followed a comprehensive and meticulous review process that involved a thorough examination of the capital expenditure (Capex) and operational expenditure (OpEx) assumptions of MainPower Electricity Distribution Company, the State electricity distribution company.
“This rigorous assessment was conducted using data and information provided by the distribution company itself. EERC also carried out a rigorous assessment of MainPower’s existing customer tariff classification and regulatory asset base. One outcome of its rigorous assessment revealed that EERC had lifeline customers paying N4.00/kwh on Band A Feeders, including a former two-time Military Administrator and former Chief of Naval Staff. The EERC, acting within the ambit of its regulatory provisions, has set tariffs appropriately based on these findings, aiming for a cost-reflective and fair market for consumers and operators alike.
FOCPEN emphasises that while Enugu State has, based on its specific market conditions and regulatory findings, adjusted its Band A tariffs downwards, this does not dictate a uniform approach for other states. For instance, several SERCs (e.g Ekiti State, Ondo State, etc) have issued tariff orders maintaining the present MYTO tariffs.
Without any equivocation, each State Electricity Regulator is uniquely positioned to determine and implement appropriate electricity tariffs that are fair to customers and at same time, catalyse investments within their electricity markets, depending on their peculiar electricity market dynamics, licensee cost structures, consumer needs and regulatory assessments”.
The Forum assured investors in the Nigerian Electricity Supply Industry (NESI) that States “are not seeking to arbitrarily downgrade tariffs, nor depend on unsustainable electricity subsidies by the Federal Government.
On the contrary, States are resolute in their call for the removal of untargeted and opaque federal subsidies, advocating instead for the establishment of truly cost-reflective sub-national and wholesale electricity markets.
“States, including Enugu State, are collectively committed towards fostering financially viable and sustainable electricity sectors where electricity tariffs accurately reflect the cost of service delivery, thereby encouraging investment and efficiency”, it added.
The group described as unfounded the fear expressed by power generation companies that the new tariff would impact their revenue.
The group pointed out that the Nigerian Electricity Regulatory Commission (NERC) continues to regulate the wholesale electricity market for the Federation.
“Therefore, the tariffs for wholesale generation and transmission services, which fall under the purview of the Nigerian Electricity Regulatory Commission (NERC), remain secure and unaffected by Enugu State’s regulatory actions.”
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