By Nathaniel Zacchaeus, Abuja
The Senate yesterday rejected the proposed plan by the Ministry of Power to increase electricity tariffs in Nigeria.
The Upper Chamber also warned the executive arm of the government against removing subsidy on electricity as being canvassed in some official quarters.
The Senate said removing subsidy on electricity in the country would be counterproductive, considering the current hardship being experienced by Nigerians.
It asked its Committee on Power to, among others, probe the recent claims of the Minister of Power, Adebayo Adelabu, on the need to impose further tariff hikes by removing subsidy on electricity.
The resolution of the Senate followed the consideration and approval of a motion by Senator Aminu Abbas (PDP, Adamawa Central).
Abbas had during Plenary moved a motion on the need to retain the subsidy on electricity in the county for the foreseeable future.
The motion co-sponsored by 10 other senators was titled, “Planned Increase in Electricity Tariff and Arbitrary Billing of Unmetered Customers by the Distribution Companies”
Abbas noted with greatest dismay the plan to increase electricity tariff by the relevant statutory authority in gross disregard of increased economic challenges with attendant widespread poverty and high cost of living.
He urged the senate to note that the Hon. Minister of Power was reported to have said, “The nation must begin to move towards a cost-effective tariff model”
Abbas added that the Minister had claimed that the country was currently indebted to the tune of N1.3trn to generating companies (GenCos) and $1.3bn owed gas companies.”
The Senator further explained that the Minister said that “out of over N2 trillion needed for subsidy, only N450bn was budgeted this year;”
Part of the motion read, “The Senate may further note that the same electricity businesses are collecting money from customers for services not rendered.
“They are doing that even when they have not added anything to the equipment, they inherited from the defunct Power Holding Company of Nigeria.
“Communities buy transformers to replace damaged ones in addition to overburden bills and arbitrary estimates for unmetered customers.
“Cognisance in a country where a greater number of the population live below the poverty level, with stagnant wages, rising inflation, and depreciating currency, the prospect of higher electricity bill is unattainable.
“Notes that the issue of arbitrary energy charges on unmetered customers has become worrisome given the February 2024 report of the Nigerian Electricity Regulatory Commission (NERC) on the non-compliance with energy billing caps by DISCOS and the penalty of ₦10.5bn imposed on the distribution companies that over-billed its unmetered customers.
“Aware in 2018, the then Hon. Minister of Power, Works, and Housing directed the Nigerian Electricity Regulatory Commission (NERC) to issue a regulation that facilitates signing of meter agreement between the Federal Ministry of Power, Works and Housing, Ziglaks company and other meter asset providers to address the metering gaps in the power supply industry.
“Further aware that as far back in 2020 the president then, ordered the Nigerian Electricity Regulatory Commission (NERC) to commence Mass pre-paid Metering to end estimated billing, and that Funds were released to that effect.
“Disturbed that the multiple sanctions declared to be imposed by NERC against DISCOs for failing to comply with the scrapping of estimated bills for unmetered customers.
“These include credit adjustments to overbilled unmetered customers for the period January–September 2023 by the March 2024 billing cycle, publication of the list of credit adjustment beneficiaries in two national dailies, and deduction of N10,505,286,072 from the annual allowed revenues of the eleven DISCOs during the next tariff review seemed to have been in futility given the continued violations by DISCOs.
“Recall that this Senate via a motion called on the Federal Government and NERC not to increase tariff on electricity for customers and citizens of this country at this time.
“Regret that in addition to the high cost of living being experienced in the country, the unmetered customers who are owners of small and medium enterprises are adversely impacted by this level of exorbitant electricity charges and by implication have their businesses affected.
“While the prospect of the new Electricity Act, 2023 of ensuring accurate electricity charges will be negated if DISCOs are not investigated to ascertain the current statistical data on unmetered customers, poor provision of electricity service despite exorbitant tariff and regulatory role of NERC which leaves much to be desired”
The red chamber therefore resolved to call on the Federal Government to stand down the idea of increasing electricity tariffs by withdrawing subsidy.
*Urges panel to probe Minister’s claims
It also mandated its Committee on Power to investigate the over N2trn subsidy requirements as stated by the Minister of Power to avoid the repeat of the fuel subsidy scenario.
The panel was also mandated to probe the statement made by the Hon. Minister with regards to the N1.3trn the ministry allegedly owed generating companies and $1.3bn owed to gas companies.
The Senate panel was also asked to investigate the role of the Ministry of Power, NERC, and Ziglaks Company on their roles in the failed agreement to provide prepaid meters and ensure Nigeria is not short-changed.
It was also asked to engage the Nigerian Electricity Regulatory Commission (NERC) to come up with a lasting solution to the Energy Billing System in the country and other related issues therein.
It also expected to find out the truth of the matter with regards to the issue of the Federal Government directive and release of funds for mass pre-paid metering and report findings to the Senate.
The panel was also asked to enforce and ensure the judicious utilisation of the N10.5 billion penalty imposed on DISCOs.
It will also investigate the operations of DISCOs to ascertain the current status of metering and their extent of compliance with relevant legal and regulatory frameworks in service delivery.
The NERC was directed to furnish the Committee with any relevant documents on the metering of electricity consumers, post-privatisation requirements for the operation of DISCOs, and evidence of regulatory actions taken to ensure statutory compliance by DISCOs.
The Senate further directed NERC to ensure the implementation of Energy caps by all DISCOS to unmetered customers in the country.
It directed the Committee to submit a comprehensive report for further legislative action within three weeks.
Last week, the Minister of Power, Adebayo Adelabu, disclosed at a press conference in Abuja that Nigeria was not likely to sustain the current electricity subsidy.
He had explained that the indebtedness of the country’s power sector to electricity-generating companies (GenCos) and gas companies (GasCos) had risen to over N3tn.
He had said, “Today, we owe a total of N1.3trn to the power generating companies, out of which 60 per cent is owed to gas suppliers. Today we have a legacy debt, before 2014, to the gas companies of $1.3bn; at today’s rate, that is close to N2trn.”
