Fashola explained that electricity tariffs will always go or down depending on dynamics of the economy.
Speaking on Thursday, July 30, during the signing of the front-runner Power Purchase Agreements between the Federal Government and 14 solar power development and promoting companies in Abuja, the Minister of Power, Works and Housing, Babtunde Fashola, commended NERC for appealing the judgement.
“I must say that as all of these are happening, the Nigerian government has demonstrated that it will play by the rules, especially in the power sector. I must, therefore, commend our regulators, NERC, for the position that they have taken regarding the judgement. The commission has shown that although it disagrees with the judgement, it is challenging it as the law allows," Fashola said in his address.
“To me, it is a positive sign for our power sector. The decision of NERC to respect the court is a sign that conflicts and interests in the power sector can be resolved in a democratic environment. These are the hallmarks of a good economic and investment-worthy destination. There are silver linings in the cloud of the setback, which the judgement appears to represent."
Fashola explained that electricity tariffs will always go or down depending on dynamics of the economy - as the raw materials for generating power increases in price, electricity rate would also increase, and vice versa.
“Let us use this opportunity to enlighten the public that tariff can never be permanently fixed, because it must be always subject to the dynamics of the economy. Therefore, if the raw materials go up, tariff must follow at the same time; in the way that if it comes down, tariff will also come down,” the minister said.
The Acting Managing Director/Chief Executive Officer, Nigerian Bulk Electricity Trading Company Plc, Mr. Waziri Bintube, signed the Power Purchase agreements on behalf of the Federal Government, as the NBET is the agency of government saddled with the responsibility of signing PPAs for the country.
Speaking on the agreements, Fashola said it will not automatically begin to yield stable electricity, but would do so over the next 18 months.
He said, “the PPAs are the heart and soul of financing power projects. They do not automatically on their own mean that we will have electricity tomorrow, but they indicate that within the next six, nine, 12 or 18 months, depending on the speed of each promoter and developer, we will begin to see incremental delivery of electricity.”
He said the solar power tariff was originally expensive but government scaled it up down after considering the interest of the power consumers.