DisCos, ANED Electricity association highlights risk of senate's resolution of new tariff

The association of Electricity Distributing Companies (discos) and association of Nigerian Electricity Distributors (ANED), have reacted to the senate's decision to suspend the new electricity tariff on February 16, 2016.

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Electricity association highlights risk of senate's resolution of new tariff play

Electricity association highlights risk of senate's resolution of new tariff

(Prenium Times)
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The association of Electricity Distributing Companies (discos) and association of Nigerian Electricity Distributors (ANED), have reacted to the senate's decision to suspend the new electricity tariff on February 16, 2016.

Read: Senate suspends power tariff hike till further notice

The electrical bodies criticized the step taken by the senate and further warned that not implementing the tariff would in no way solve the electricity challenges is currently having and would leave the country in continued darkness, with diminished and no future prospects of growth of the economy.

Also commenting on the act of the senate, Mr. Sunday Oduntan, Executive Director, Advocacy and Research of the association stated that the resolution of the new electricity tariff will come with consequences.

The statement reads;

The Senate on Tuesday, February 16, 2016 passed a resolution directing the Nigeria Electricity Regulatory Commission (NERC) to suspend the recently-implemented electricity tariff (MYTO-2015).

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However, implementation of this resolution is not without consequences and the following are a few of them. A market priced tariff is a fundamental requirement under the agreements signed between distribution company (disco) operators in the Nigerian Electricity Supply Industry (NESI) and the Bureau for Public Enterprises (BPE), raising the concern for sanctity of contract.

Such a failure will be at a price that the government can ill-afford in these times of die economic challenges.

A market priced tariff is critical to address decades of under-investment (for instance, the five million metering gap) in the sector.

Worldwide electricity reforms have always been tied to increased investment, resulting in improved production efficiency. Such investment is predicated on access to capital, which will be jeopardized in the absence of a market priced tariff.

The absence of a market priced tariff will endanger the viability of the entire value-chain of distributors, generators, transmission and gas suppliers, resulting in the failure of the sector”, he further said.

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Oduntan highlighted things and sectors that will affected by the halt in the project including, loss of employment and livelihood for approximately 50,000 Nigerians, indirect job losses from factory and other business closures, possibly in the millions.

He also stressed that it would discourage further investments in the development of gas reserves and production for local consumption.

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