Connect with us

Local News

New Tariffs Take Off As NERC Sets Rules For Operators

Published

on

images 29 2 New Tariffs Take Off As NERC Sets Rules For Operators

• N4 for the poor’ — DisCos begin new service-based electricity tariff
• To penalise Discos, TCN for power rejection, under-supply
Emmanuel Addeh in Abuja
The Nigerian Electricity Regulatory Commission (NERC) yesterday issued guidelines to stop the blame game between the Transmission Company of Nigeria (TCN) and Distribution Companies (Discos) over the latter’s alleged incessant rejection of power.
The new guidelines came as the revised electricity tariffs to be paid by some electricity consumers, earlier approved by President Muhammadu Buhari and the NERC, commence today.
Under the guidelines, NERC said that, “the federal government under the Power Sector Recovery Plan (PSRP) financial plan has committed to funding the revenue gap arising from the difference between the cost reflective tariffs determined by the commission and the actual end-user tariff during the transition to the cost-reflective tariff.”
In documents containing the official communication between NERC and the Discos, which detailed the reviewed rules, the regulator said any rejection of power by either the Discos or under-supply by the TCN would now attract a “capacity charge.”
TCN has always complained that the country’s power supply situation is worsening because of the rejection of electricity allocation by Discos, noting that the problem persisted because the distributors can drop load and increase it at will without being penalised.
“Where it is established that the TCN is unable to deliver Discos’ load allocation, TCN shall be liable to pay for associated capacity charge. Where Discos fail to take its entire load allocation due to constraints in its network, the Disco shall be liable to pay capacity charge as allocated in its vesting contracts,” NERC stated.
The new order instructed the Discos on the modalities for billing customers who fall under different classifications with the commencement of the new tariffs, saying that Nigerians who receive less than 12-hour supply of electricity will not be affected in the latest increase until service improves.
“This order shall take effect from September 1, 2020 and shall cease to have an effect on the issuance of a new minor review order or an extraordinary tariff review order by the commission,” NERC stated.
It said the commission took the decision after it reviewed the application filed by the Discos, taking into consideration the outcome of the public consultations held in February and March and thereafter approved the new tariff regime that will cover from September to June 2025.
“The order reflects the impact of changes in macroeconomic parameters and revenue requirements and a revised tariff design that aligns rates paid by customers with the quality of services as measured by the average availability of power over a month period.
“Pursuant to the objective of incentivising a continuous improvement of service for all customers, there shall be no tariff reviews for customers experiencing an average power supply availability of less than 12 hours per day over a period of one month.
“Unmetered customers within service bands A,B and C thus benefiting from a supply availability in excess of an average of 12 hours per day over a period of one month as affected by this tariff order shall be protected by the provision of order on capping of estimated bills in the NESI and federal government intervention on accelerated metering of all customers.
“The commission orders that you shall continue to maintain the lifeline tariff of N4 per kW for all customers consuming less than 50kw per hour of energy per month as a safeguard for the less privileged members of the society,” NERC added.
On the objectives of the order, NERC noted that it seeks to ensure that prices are fair to customers and sufficient to fully recover the efficient cost of operation, including a reasonable return on capital invested in business by the Discos.
The power sector regulator said the new guidelines would provide a path to a transition to full service-based cost-reflective tariffs by July 2021 and re-classify as well as disaggregate customer clusters on the basis of commitment to quality of service.
Upon evaluation, NERC said it considered and approved five tariff service bands representing relative quality of service experience.
It told the power distributors that it arrived at the new rates after considering the country’s rate of inflation for July 2020 as obtained from the National Bureau of Statistics (NBS), which was 12.82 per cent.
NERC further pegged the applicable exchange rate of N383.80 and gas price of $2.50/mmbtu and gas transportation cost of $.80 mmbtu.
However, it said there would be a “tariff freeze” for customers in bands D, E, directing that they shall be charged tariffs obtainable prior to the take-off of the new rates pending when power improves.
“Following consultations on directions on tariff policy, the commission hereby approves a deferment of the applicable tariffs for customers in service band D and E ( less than 12 hours per day over a month),” it added.
NERC explained that where there is a failure to deliver a committed service level over the evaluated period of 60 days, the rates payable by customers should be retroactively adjusted in line with quality of service delivered over the same period of time.
It said under the current framework, the minimum market remittance threshold for Discos would be determined after deducting the revenue deficit arising from tariff shortfall from aggregate Nigerian Bulk Electricity Trading (NBET) Limited and Market Operators’ (MOs) market invoices.
The regulator stated that the Discos should be availed the opportunity to earn their revenue requirement only upon fully meeting payment obligations, including repayment of CBN -NEM facility, 100 per cent settlement of MO invoices and full settlement of 83 per cent of NBET’s monthly invoices, being the minimum remittance threshold prescribed in the order.

Continue Reading
Comments

Local News

N392bn projects debt: Senate asks FG to consider pension fund

Published

on

images 97 1 N392bn projects debt: Senate asks FG to consider pension fund

The Minister of Works and Housing , Babatunde Fashola , on Wednesday , told the Senate that the Federal Government owe construction firms handling 711 road projects across the country N 392 bn .
The debt , according to the minister , was higher than the N 276 bn , proposed as budgetary allocation for road projects in 2021 .
Fashola who stated this on Wednesday in Abuja while defending the 2021 budget of his ministry before the Senate Committee on Works .
He said, “ With the situation on ground , a stop has come for new projects and the country needs to prioritise the existing ones in order to complete some of them .”
He said N 6 . 62 tn was needed by the Federal Government to fund the 711 road projects across the country .
The minister , however , said the resources to achieve that were not available now , hence the need to prioritise the very important ones .
He said, “ We do not have the resources that we need to fix our road infrastructure at once ; the very reason we need to prioritise what want to do .
“ The situation on ground requires us to cut our coat according to our cloth and not according to our size because no good will come out of more new road projects now .”
He however explained to the committee that in order to remedy the situation , the 711 projects had been categorised into four different areas of funding and execution.
The first category , he said, was the highway projects financed with the Presidential Infrastructure Development Fund.
The projects, he said , covered projects such as Lagos – Shagamu – Ibadan dual carriage way , the 2 nd Niger Bridge and the rehabilitation of Abuja – Kaduna-Kano dual carriage way.
The second category , according to the minister , are highways projects financed with the Sovereign Sukuk Fund totalling 44 roads across the six geopolitical zones .
Fashola said the third category included the highways project financed under the tax credit like the Lokoja-Obajana -Kabba – Ilorin road , Apapa -Wharf Road in Lagos and the Apapa -Oworonsoki – Ojota Expressway , among others .
Those in the fourth category he stated are highways projects funded from multilateral loans .
The Chairman of the Committee , Senator Adamu Aliero, suggested to the minister to look into pension funds for some of the road projects.
He said, “ In view of the scarce resources and poor revenue generation which the country is currently facing , I think the ministry could consider applying for funds from the PenCom funds. ”
Fashola , however, said he said he was not in a position to do that .
He said, “ The Central Bank of Nigeria seems to be in the best position to work out such arrangement.
“ It will be helpful if that type of funding can be put together , ” he said.
Aliero , however, said the fact was that the budgetary allocation to the ministry and its agencies remained one of the highest , but was like a drop of water in the ocean .
“ This is because of the humongous work to be done on Nigerian roads and the current debt profile of the ministry which is about N 392 bn ,” he said.

Continue Reading

Local News

ALTON apologises for network disruption

Published

on

images 95 1 ALTON apologises for network disruption

The Association of Licensed Telecommunication Operators of Nigeria has apologised to subscribers for network outages in some part of the country .
The Association in a statement on Wednesday attributed the network disruption that still subsists as of the time of filing this report to power cuts and operations -related issues .
According to ALTON, network disruption is not intentional .
The statement said, “ The outages have been compounded by power and other operations -related issues that have occurred across some major routes in Lagos metropolis and other states resulting in congestion of networks and impact on quality of services .”
The association said movement restrictions and the volatility on the streets had compounded the restoration of outages because engineers had not been able to move about to fix the problems .
It added , “ At the moment, affected member operators are exploiting all avenues to remedy the situation . Engineers are making relentless effort round the clock to resolve issues , while in the interim, efforts are being made to optimise coverage utilising alternative solutions as a stop -gap solution to the most impacted locations.
“ We appeal to subscribers to please bear with us and be patient . Let us remember that we need both voice and data communication especially at this critical time . ”
The association appealed to people at the barricades to grant access to telecoms engineers to be able to access the affected locations to restore telecom services .
It expressed regret over recent incidents of violence across the country as well as destruction of lives and properties.

Continue Reading

Local News

I Didn’ t Reject Your Offer Of Renovating My Palace, Soun Tells Makinde

Published

on

Pic 30 condolence visit I Didn’ t Reject Your Offer Of Renovating My Palace, Soun Tells Makinde

The Soun of Ogbomosoland, Oba Jimoh Oyewumi Ajagungbade III, has denied the content of a letter purportedly authorised by him, which rejected the financial contribution of the Governor Seyi Makinde of Oyo State in the planned renovation of the monarch’s palace vandalised by hoodlums during the #EndSARS protest on October 10.
The Soun, who spoke with the Chief Press Secretary to Governor Seyi Makinde, Taiwo Adisa, said that he did not authorise the said letter in circulation.
Adisa disclosed to Governor’s Office correspondents, quoting the monarch: “If your boss sees any such letter, he should ignore it, because I didn’t ask anyone to write such a letter.”
“The Soun said that he never authorised anyone to issue a letter on his behalf and that if any such letter surfaces, some persons must have forged his signature.”
“The Soun said he wholeheartedly welcomes the intervention of Governor Seyi Makinde in the plan to fix the palace and all the damaged items.”
The purported letter claimed the monarch said the damages incurred during the unfortunate incident would be taken care of by a coordinated community effort of Ogbomoso sons and daughters.
The letter further added that a N10m released by the governor would be added to the contributions of his subjects, while it allegedly quoted the monarch saying there was no need to disburse the balance of the sum of N90m.

Continue Reading

Trending