How 45% electricity tariff hike will affect you On February 6, 20166:57 pmIn BusinessComments STORIES By Udeme Clement The 45 percent increase in electricity tariff with effect from February 1, 2016 is unsettling for many Nigerians, especially consumers paying with estimated bills. While the Nigerian Electricity Regulatory Commission (NERC) said that increase in tariff will enhance service delivery and customers’ satisfaction, a large number of consumers, especially manufacturers, are calling on the Federal Government to provide prepaid meters for the people as a matter of urgency. fasholaUnder the new power tariff regime, electricity consumers in R2 class, said to be under residential, will payN24.30 per kilowatt in Abuja; Benin-N24.08; Enugu-N27.13; Ibadan -N23.09; Jos- N26.93; Kaduna – N27.36 and N28.05 (in single phase and three phases); Kano – N20.26 and N26.41; Ikeja – N21.30 and N21.80; Port Harcourt –N24.91; Eko- N24.00 and 25.79; Yola –N23.25 and N24.75 per kilowatt. Meanwhile, residential customers under R2 class within Abuja Electricity Distribution Company will no longer pay N702.00 fixed charge every month; instead, their charge will increase by N9.60kwh. The residential customers in R2 category within Eko and Ikeja Electricity Distribution zones will no longer pay N750. 00 fixed charges. They will pay N10kwh and N8kwh increase in their energy charges. The burden of N800.00 and N750.00 fixed charges will be removed from Kaduna and Benin electricity consumers, while they will get an increase of N11.05kwh and N9.26kwh in their energy charges. The commercial consumers in C2 category in Ibadan and Enugu will no longer pay fixed charges of N17, 010. 00 and N22,141. 00; instead their energy charge will increase by N12.08kwh and N13.35kwh. The Minister of Power, Babatunde Fashola, explained that the increase in tariff will boost investment in the sector. He added that once more investors bring money into the sector, the cost of electricity consumption may decrease in the near future. When Sunday Vanguard visited the office of the Manufacturers Association of Nigeria (MAN) at Ikeja, Lagos, to get their reaction on the new tariff regime, many manufacturers lamented the new increase, saying the hike in tariff without giving all consumers prepaid meters to measure the exact amount of electricity they consume on monthly basis is another way of exploiting the people, especially manufacturers whose businesses are already going under. Manufacturer perspective: In a chat with Sunday Vanguard, the Chairman, Toiletries and Cosmetics Group, Manufacturers Association of Nigeria (T& C group of MAN), Mr. Ikpong Umoh, mentioned erratic power supply and over billing from electricity tariff fixed on estimated charges by power companies among the biggest challenges killing the manufacturing sector in Nigeria. He stressed, “As manufacturers, we need constant electricity to carry out production. At the moment, we generate electricity by ourselves using power generating sets and spending huge amount to purchase diesel on daily basis. Over 40 percent of our total cost goes into power generation. We will appreciate if the power companies can give us constant electricity supply at affordable rate that manufacturers can pay. Power supply now is still erratic, and power disruption completely disrupts production process, which makes manufacturers incur huge losses. For example, if you are producing and suddenly power goes off, everything at that process is destroyed, thereby making you incur losses. “My worry is that increase in power tariff is too frequent and does not usually commensurate with the quantity of electricity they power companies give us, meaning, we are actually paying for what we are not using. For example, increase in electricity tariff in the past did not bring about increased in electricity supply for consumers. So, the power companies should have improved on power output for consumers first before increasing the tariff again. But now, they have increased the tariff without increasing the capacity of power supply for consumers to have value for the money they are paying, something must be done about this”. Power generating capacity: Currently the power generation capacity stands at between 4,500 and 5,000Mega Watt (MW). In the last five years, power generation capacity in the country has been quite insufficient. For instance, in 2011 electricity generating capacity was estimated at 4,321mw, 4,517mw in 2012, 3,563mw in 2013, showing a huge decline, 3,513mw in the last quarter of 2014, between 4,000mw and 5,000mw in 2015. Privatisation and injection of funds into power sector: Notwithstanding the privatisation of the Power Holding Company of Nigeria (PHCN) and injection of billions of Naira by the Federal Government into the sector, power crisis continues to linger. At the twilight of the last administration, government approved N18.26billion loans for five power companies to boost electricity supply, after approval of huge sums like N5.2billion for the sector, N3.9billion for power transmission infrastructure and N1.3 billion for manpower development and training of 3,700 trainees under the National Power Sector Apprenticeship Scheme (NAPSAS), all without commensurate output in electricity supply. In 2013, government promised to hit a target of 10,000mw generation capacity in December 2013 but it was not realisable. Government made similar effort in 2009 to hit 6,000mw of electricity generation, but it was not realisable, even as gas shortage was said to be one of the major factors impeding the process. Shortage of prepaid meters for consumers: Distribution of prepaid meters to consumers in order to stop estimated billing system has not been done for years now. The previous government introduced a scheme for Nigerians to pay between N50,000 and N25,000 for prepaid meters under the new Credited Advance Pay for Metering Implementation (CAPMI) scheme, but the outcome was not known at the end of the exercise. That time, the Chairman of NERC, Dr. Sam Amadi, explained that the single phase pre-paid metres would be sold for N25,000 and three phase metres for N50,000. He listed Ibadan, Eko, Benin, Abuja and Kano as the companies to be used for the pilot scheme of CAPMI, yet the scheme was unsuccessful

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