‘Provide investment plans, financials’ — NERC gives DisCos guidelines for tariff hike

‘Provide investment plans, financials’ — NERC gives DisCos guidelines for tariff hike

 The Nigerian Electricity Regulatory Commission (NERC) has
issued regulations on the procedure for tariff reviews.

 

The development comes a few days after reports had suggested
that the electricity tariff will be reviewed upwards.

 

However, in its latest order signed by Sanusi Garba,
chairman of NERC, the commission said electricity tariffs are to be reviewed
every five years based on the provisions of the Multi-Year Tariff Order (MYTO)
methodology.

 

The commission said all tariff assumptions are reviewed to
ensure the industry’s viability and efficiency

 

NERC added that one year before a major tariff hike, it would
issue a notice to all licensees about its intention while requesting them to
submit applications for the review of tariffs supported with necessary
documentation within 120 days of the notice.

 

“The commission shall, one year before the expiration of the
major tariff review order in force or as may be considered necessary, issue a
notice to all licensees about its intention to commence the process for a major
review of the existing tariff.

 

“The notice shall be published in three national dailies and
on the website of the commission.

 

“The Notice shall request for submission of applications for
the review of tariffs supported with documentation that includes but not
limited to audited financial statements, budgets, investment plans (in line
with prevailing guidelines on Performance Improvement Plans), and proof of wide
consultation with customers in the licensees’ service area concerning the
proposed filing of the application for tariff review and any other information
as deemed necessary by the commission.”

 

90-DAYS CONSULTATION
PERIOD FOR TARIFF REVIEW APPLICATIONS

 

Also, the commission said for a review to be done, all
applications from licensees must be completed and a consultation paper
developed no later than 90 days after the deadline for the submission of the
applications.

 

According to the regulator, the consultation paper developed
by the commission shall outline the basis for the tariff review applications by
the licensees.

 

The paper would also include their proposals on capital
investments, service improvements, new connections, loss reductions, reset of
tariff assumptions if any, and possible impact on rates payable by the affected
customers.

 

“The consultation paper shall be published on the
commission’s website and public notices issued soliciting comments with a
timeline of 21 days for submission by stakeholders,” NERC said.

 

“The commission shall within 90 days from the publication of
the consultation paper review all comments and schedule and conclude a Rate
Case Hearing, having regard to the stakeholders’ responses to the consultation
paper.”

 

The regulator also said it would consider and approve a
major tariff review order within 30 days from the date of the rate case hearing
and proper consideration of the outcomes of the general stakeholders’
presentation.

 

“Any licensee whose tariffs have been reviewed shall
communicate the outcome of the tariff review to its customers via its website
and other communication channels,” NERC added.

 

On April 3, 2024, NERC approved a threefold increase in
electricity tariff for customers under the Band A classification.

Source: ‘Provide investment plans, financials’ — NERC gives DisCos guidelines for tariff hike

 - NigerianEye
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