• Tariff hike: 20 hrs supply for Band A customers under threat

    Tariff hike 20 hrs supply for band a customers under threat - nigeria newspapers online
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    By Udeme Akpan, Obas Esiedesa & Ediri Ejoh

    Barely one week after the new tariff regime which increased electricity tariff by 231 per cent for category A consumers, there are indications that the electricity supply capacity is grossly inadequate to meet the 20 hours per day minimum benchmark for the new tariff while accommodating another category of consumers.

    The 11 Electricity Distribution Companies, DisCos, operating in the electricity sector were yesterday, allocated just 3,236 megawatts, MW, thus constraining them from delivering a minimum of 20 hours of power supply to consumers under ban A nationwide.

    Vanguard findings show that this has been the average supply before the tariff jerk-up and no improvement has been made since the new tariff came into force last week.

    The new Multi-Year Tariff Order, MYTO, that raised electricity rates for about two million customers by 231 percent to N255 per kilowatt, from N68 per kilowatt, Vanguard findings further show, is running under power generation stranded at 4,200 Megawatts in the past seven days.

    Information in the data supplied by Independent System Operator, ISO, showed that as at 3pm, yesterday, load allocation to the eleven DisCos which stood at 3,236 Megawatts, gave Abuja Disco the highest allocation at 611MW, followed by Ikeja Electric (603MW), Eko DisCo (513MW), Ibadan DisCo (323MW), Benin DisCo (219MW), and Enugu DisCo (193MW).

    Others were Port Harcourt DisCo (191MW), Kano DisCo (181MW), Kaduna Electric (174MW), Jos DisCo (152MW) and Yola DisCo (76MW).

    The shortfall in supply has prompted some DisCos to appease their customers with Port Harcourt DisCo issuing public apologies.

    PHEDC apologises for shortfall

    The PHEDC in a statement titled ‘Service shortfall’ said: “Kindly note the current service shortfall experienced in areas where we did not meet up with the contractual supply hours on 8th of April, 2024”.

    The company listed the affected feeders as Amika and Refinery lines with areas such MM Highway, Mariam road, Rumukwurushi, Aweto Guest House, Atali, Igwuruta Road, Rumuibekwe-Bori road, Ahoada road, Ogbonda, Aba-Road, Eleme Junction, Eneka, New-layout Eneka road, Igwuruta-Ali, affected.

    The utility blamed load shedding by the Transmission Company of Nigeria, TCN, as well as “preventive maintenance and line vegetation control”, for the shortage in supply.

    Also, to ensure that it does not fall short of the standard required by the new tariff, Kaduna Electric has disclosed that it has set up teams to rapidly respond to downtime for Band A feeders.

    Kaduna DisCo sets up response teams

    A statement issued by the company’s Head of Corporate Communication, Abdulazeez Abdullahi, said setting up the rapid response team is part of Kaduna Electric’s efforts to ensure uninterrupted power supply to the Band A customers whose tariff has just been adjusted.

    It called on customers to contact the teams to report faults for prompt response. The company said, “The four-member team set up to cover Doka, Zaria, Rigasa and Barnawa regions each in Kaduna state where majority of the Band A feeders are located are to operate round the clock to ensure speedy clearance of faults and restoration of supply whenever there is a downtime”.

    No transparency, fairness in billing — CPPE

    Meanwhile, making his observations on the electricity tariff development, the Founder/CEO, Centre for the Promotion of Private Enterprise, CPPE, Muda Yusuf, said: “Some of the DisCos have issues that could be traced back to the privatisation era. Some of them did not have the required technical and financial capacity to buy or run the DisCos and add much value to deliver adequate and stable power to consumers.

    “Also, millions of consumers have not been metered. So, how do you accurately bill someone that doesn’t have meter? It is not fair to bill someone that has no meter.”

    Businesses will pay heavily for the services they don’t enjoy — LCCI

    Commenting also, the Director General, Lagos Chamber of Commerce and Industry, LCCI, Chinyere Almona, said: “Our major concern is seeing our members pay heavily for the services that they may eventually not enjoy optimally. It is a grave concern that with a higher cost of power, companies are still not having access to the services.

    “With higher tariffs and without the power supplied, our members will still have to invest in generating plants to provide power to run their businesses. We call for an aggressive metering programme that leads to 100 percent coverage of electricity consumers. This guarantees liquidity for the distribution companies and gives more satisfaction to consumers with a feeling of paying for what they consume. Earlier in the year, a global business media,

    “Bloomberg, reported that ‘Nigeria has a woeful lack of generating capacity and part of the energy that is produced goes to waste because it can’t be distributed through the dilapidated grid. Electricity suppliers aren’t allowed to charge cost-reflective tariffs and struggle to collect revenue due to inadequate metering, deterring new investment’.

    “Beyond the provision of infrastructure, we need to have a sound regulatory and policy environment to attract more foreign investment into the power sector. The higher tariffs will add to the cost of production, which translates to higher prices of goods, making Nigerian products less competitive in the international export market

    “We are concerned that businesses will face a double whammy of paying a higher electricity tariff and another cost to provide private electricity supply. We urge the Federal Government to invest more in the power sector to guarantee power supply to businesses and other consumers.”

    Expert expects improvement

    However, in a note to Vanguard from Port Harcourt, the Founder, Spark Nigeria, Mr. Chinedu Amah expressed optimism that the initial challenges faced by the utilities in meeting the 20-hour minimum requirement would be resolved.
    According to him, “Service optimization starts from a place of design. Several persons who I’ve spoken to that are serviced on Band A have had improved supplies while some others have some issues, it’s a learning period I’m positive it will get better”.

    He pointed out that “Subsidy removal for the identified and most efficient feeders is a good step as it will unlock improved revenue that will increase access to investment capital for the DisCos and possibly open them up to viable investors”.

    On challenges faced by customers in Band A without meters, he wrote: “Metering isn’t a big deal, with improved revenue and revenue assurance backed by policy DisCos can invest to close that metering gap. DisCos are in this for business, they know NERC will not hesitate to penalise them if they do not deliver”.

    Giving some clarifications on the new tariff regime recently Vice Chairman, NERC, Mr. Musiliu Oseni insisted that the Commission has all it takes to enforce the 20 hours minimum supply for Band A customers, pointing out that DisCos who failed to meet their obligations would be sanctioned.

    According to the NERC, Band A customers are those electricity users who enjoy power supply for a minimum of 20 hours daily.

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