PHCN’s New Tariff Takes Off Today
01 Jul 2011: Olatunde Sanni
THE new tariff of the Power Holding Company of Nigeria (PHCN) will take effect from today, according to the Multi Year Tariff Order (MYTO) regime; Nigerians will now be paying N40 per kilowatt as against N8 per kilowatt in the old regime.
In exercising the powers vested in it by Section 76(6) of the Electric Power Sector Reform Act 2005 and of all other powers enabling it in that behalf, the Nigerian Electricity Regulatory Commission (NERC) adopted the MYTO methodology for electricity pricing in Nigeria, which sets out the basis and pricing principles and procedures for affecting minor and major reviews.
The MYTO provides a 15-year tariff path for the electricity industry, with limited minor reviews each year in the light of changes in a limited number of parameters (such as inflation, US dollar exchange rate, and gas prices) and major reviews every five years, when all of the inputs are reviewed with stakeholders.
It was supposed to have taken effect in January 2011, but due to pressures from the National Union of Electricity Employees (NUEE), it was postponed to March. It could not take effect in March, because election was around the corner. Now that election is over, the Federal Government, through its agency, NERC, announced a fortnight ago in Abuja that it would take effect from July 1, 2011.
Meanwhile, reactions have been trailing the increase in electricity tariff. The president of Senior Staff Association of Electricity and Allied Companies (SSAEAC), Comrade Bede Opara, told the Nigerian Tribune by phone on Thursday that Nigerians’ suffering would increase, if the new tariff was implemented against their wish and that of electricity workers.
“Telling Nigerians to pay what they are paying is even wrong because they are not enjoying the services they are paying for. Nigerians are complaining that the bill is high and yet, you are asking them to pay more while there is no improvement in power generation.”
Another stakeholder in the power sector, the Business Development Manager, Biopower Nigeria Limited, Mr Lanre Agboola, told the Nigerian Tribune that the Federal Government was insensitive to the plight of Nigerians. He said the government should have made provisions for improvement in power generation before introducing higher tariff.
“When the telecoms operators came with prepaid billings, people bought into it because you can evaluate what you are paying for, but when there is no improvement in power supply and you are asking Nigerians to pay more is unjustifiable,” he said.