The Nigerian Electricity Regulatory Commission, NERC, has approved new Extraordinary Tariff Review applications, Performance Improvement Plan, PIP, and Capital Expenditure, CAPEX, for electricity Distribution Companies, DIcOs, effective July 1st, 2021 through June 30th, 2026.
This was in contrast to the earlier stance of the Minister of Power, Engr. Sale Mamman, who had assured customers that there would be no major tariff increases over the weekend.
The NERC orders, however, given to the various DISCOs on Sunday, were about applications for extraordinary tariff review, Performance Improvement Plans, and capital expenditure for the next five years, starting on July 1st, this year.
The NERC said of Ikeja Electricity Distribution Plc, IKEDC, “This regulatory instrument may be cited as NERC Order on PIP and Extraordinary Tariff Review Application for Ikeja Electricity Distribution Plc (IKEDC).”
According to the NERC paper, IKEDC, like the other DISCOs, requested a review of the CAPEX provisions in its Multi-Year Tariff Order, MYTO, tariffs in November 2019 to facilitate the introduction of its PIP over the next five years.
“Under the Power Sector Recovery Program, PSRP, it is envisaged that the commission will introduce a comprehensive tariff review mechanism aimed at improving efficiency in the Nigerian Electricity Supply Industry, NESI,” the order said.
“This procedure entailed a study of CAPEX allowances in MYTO model compliance with DISCO PIPs.
“The approved PIP and Extraordinary Tariff Application would serve as the foundation for IKEDC’s prioritisation of the proposed CAPEX initiatives.
“The approved PIPs will also serve as the foundation for the Commission to define the Key Performance Index for IKEDC over the next five years, with a focus on enhancing energy efficiency and customer service delivery.”
IKEDC proposed a number of measures to enhance customer service delivery.
The proposed interventions would enable the company to increase total energy supplied across IKEDC from 4,469GWh/year in 2019 to 5,263GWh/year by December 2022 over the next five years.
Over the same time frame, the energy provider intended to increase the average duration of supply to consumers in each tariff band. It stated that platinum cluster will be increased from an average of 17 hours per day to a minimum of 20 hours per day.
By December 2022, the IKEDC hoped to reduce the average length of outages from 12 hours to 8 hours per month.
The Abuja Electricity Distribution Firm, AEDC, suggested a number of measures to boost service quality to customers.
Over the next five years, the proposed interventions would allow AEDC to significantly enhance service quality, including but not limited to the following:
“Over a five-year period, reduce ATC and C losses from 45 percent to 19 percent.”
“Achieve 100% customer metering by installing 698,606 metres over three years + Improve customer protection and minimise inadvertent accidents”
“Increase the number of new customers from 1,214,259 to 3,450,695 over the next five years.”