NERC delays electrical energy tariff assessment for fourth time - Geo Tv News

NERC delays electrical energy tariff assessment for fourth time

The implementation of the Multi-Yr Tariff Order (MYTO) framework for electrical energy pricing has once more been delayed for the fourth minor assessment which happens each six months.

Each day Belief studies that the tariff which ought to now be at a median of N51 per kilowatt hour (kWh) continues to be at N31.8 because the implementation of the critiques suffers delays.

The sector regulator – the Nigerian Electrical energy Regulatory Fee (NERC) – had pegged the N31/kwh within the MYTO 2015 primarily based on some macroeconomic indices together with inflation, overseas trade charges and energy era outputs amongst others. The tariff was signed on December 18, 2015, and carried out on February 1, 2016.

It ought to have been reviewed with the result carried out by July 2016, with the fourth consequence to be carried out by January 2018. Nevertheless, final weekend, an official of NERC defined the implementation delays which needs to be at a median N51 per kWh, if it had been carried out following the steep rise in macroeconomic indices.

Some officers of the electrical energy Distribution Firms’ (DisCos) part of the sector worth chain, at a session by NERC in September, have been involved about their inputs submission for at the least two MYTO critiques as they haven’t seen any outcome.

Market loses N460bn to tariff shortfalls

The Affiliation of Nigerian Electrical energy Distributors (ANED) mentioned in its newest report that the delays within the tariff critiques, their implementation and another inconsistencies have brought on the electrical energy market a shortfall of N460 billion.

It mentioned the freeze on Residential clients 2 (R2) tariff between January and June 2015; adjustments to tariff assumptions and different points brought on the N460bn tariff deficit from 2015 to December 2016.

The breakdown reveals that the R2 buyer tariff freeze, removing of assortment losses from the tariff, although reinstated later, brought on N187bn shortfall.

ANED mentioned in 2016, one other N277bn deficit occurred when NERC determined to work out a 10-year tariff plan from 2015 to 2024. One other N46bn ensuing from non-review of the tariff assumptions occurred within the two assessment intervals of 2016, it famous.

With the 2 pending critiques for 2017, the group mentioned, the shortfall could be far above N52bn noting that the result for the fourth assessment needs to be carried out on January 1, 2018, however the DisCos haven’t been referred to as by NERC to submit their inputs.

The Director of Analysis and Advocacy for ANED, Mr Sunday Oduntan, advised Each day Belief that the 11 DisCos can’t pay 100 per cent for the invoices of vitality and companies to the Nigeria Bulk Electrical energy Buying and selling Plc (NBET) and the Market Operator (MO) because of the tariff shortfall.

Most of the DisCos usually remit beneath 50 per cent of their bill figures for month-to-month vitality equipped to them by the Era Firms (GenCos) by way of the Transmission Firm of Nigeria (TCN). “It’s tough to pay 100% for vitality once we promote the product for N31.58k however purchase it as excessive as N68. There is no such thing as a means it would work,” Oduntan mentioned.

[Daily Trust]

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