Six Factors That Influence Hike In Electricity Tariff In Nigeria, New Rate Takes Effect April 1

Following the order issued by National Electricity Regulatory Commission (NERC) on December 31, 2019. Eko Electricity Distribution Company (EKEDC), has announced that starting from April 1, 2020, electricity tariffs will increase from the current N28.48k to N42.41k per Kilowatt.

The announcement was made in Lagos on Monday, by the commission at the ongoing Stakeholders Forum tagged “Extraordinary Tariff Review Applications and Decommissioning of Unistar Meters”.

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Factors Necessitating Electricity Tariff Increment

.According to Eko DisCo and NERC the hike in tariff has become inevitable for the following reasons:

1. The industry recorded a shortfall of ₦1.7 trillion, a huge debt impacting negatively on the organisation

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Other reasons given include:

2. Bi-annual tariff reviews which were not implemented for three years between 2016-2019 which has led to significant losses for Eko Disco.

3. To meet minimum payable remittance for 2019 and 2020

4. To comply with the order of National Electricity Regulatory Commission (NERC)

5. Pursuant of section 32 and 76 of the EPSR Act

6. Macroeconomic variables such as: Exchange Rate, Inflation rate of 11.3% and Gas Transportation costs

The order according to NERC is in pursuant of Section 32 and 76 of the Electric Power Sector Reform Act aimed at providing a cost reflective tariffs that ensures prices charged by licensees are fair to consumers.

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Under the new tariff regime, consumers paying N28.48k will now pay N42.41k per Kilowatt according to Eko DisCo. The tariffs differs for other DisCos and states in Nigeria.

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