The Chief Executive Officer, Federal Competition and Consumer Protection Commission, Mr Babatunde Irukera, has opposed the proposed increase in electricity tariff.
Irukera said it was inappropriate for electricity distribution companies to focus on tariff increase as the only way to increase efficiency.
He spoke at a public hearing on extraordinary tariff review application organised by the Nigerian Electricity Regulatory Commission in Lagos.
He noted that the Discos had identified low tariff, energy theft and metering as major factors responsible for some of the problems in the power sector.
He said, “If you are going to promote efficiency, the only way to promote it certainly cannot be by increasing tariffs. There is absolutely no question about the fact that increasing tariffs will not in itself necessarily promote efficiencies.
“So long as you have fewer people paying for what most use, you will not find a cost-reflective tariff. The answer cannot be burdening those few (who pay their bills) with more. What about metering? There is still a vast majority of bills that are paid today by estimation; 55 per cent of consumers are still unmetered.”
According to him, the distribution companies came to an understanding with the Bureau of Public Enterprises in 2015 that they would meter more aggressively.
“They said that over the next three years, they would meter approximately 4.5 million customers. And that gave us an annual target of about 1.6 million meters,” he said.
He noted that not much had been done by the Discos to bridge the metering gap.
“How can we even find a cost-reflective tariff when more than half of your collection is based on estimation or assumption? Every time there is a revenue shortfall, those who are not metered would pay for it. And that is why estimated billing has now become another word for arbitrary billing.”
The Commissioner, Finance and Management Services, NERC, Mr Nathan Shatti, who chaired the public hearing, said the commission received applications from the Discos for an extraordinary tariff review to enable them to make some investments and improve their services.
“As a commission, our business rules require we cannot just sit down in Abuja and make decision on those applications. We have to do public hearing, and the intention of the public hearing is to allow stakeholders and consumers in the industry to listen to the applications that the Discos made, and to critique, ask questions and make recommendations.”
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