Although the regulator plans to increase electricity tariffs on April 1, it says the amount of money recoverable by power distributors from consumers will fall short of their revenue requirements, ’FEMI ASU reports
Electricity distribution companies in the country will record a tariff shortfall of N545bn this year, an analysis of data obtained from the Nigerian Electricity Regulatory Commission has shown.
The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells through vesting contracts to the Discos, which then supply it to the consumers
NERC, in its December 2019 Minor Review of Multi Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 for the 11 Discos, said on Saturday that consumers would start to pay more for electricity from April 1, 2020.
It said the Federal Government had, in the interim, committed to funding the revenue gap arising from the difference between cost-reflective tariffs determined by the commission and the actual end-user tariffs payable by customers.
According to the regulator, the Federal Government will fund the tariff shortfall through the Nigerian Bulk Electricity Trading Plc and the Market Operator, an arm of the Transmission Company of Nigeria.
According to the commission, tariffs will be fully cost-reflective by the end of 2021.
It said all the Discos “are obligated to settle their market invoices in full as adjusted and netted off by applicable tariff shortfall.”
“All the FGN interventions from the financing plan of the PSRP for funding tariff shortfall shall be applied through the Nigeria Bulk Electricity Trading Plc and the market operator to ensure 100 per cent settlement of invoices issued by market participants,” NERC added.
No comments:
Post a Comment