Gas, Water Constraints Shrink Power Generation, Stall Tariff Hike

Afam Power plant

Afam Power plant


Indications emerged on Thursday that the planned July 1, 2021 review of the various electricity tariffs in Nigeria had been stalled following concerns around low power generation by the sector.

It was gathered that gas constraints to gas-fired power generation plants and the reduced water level needed by hydropower stations had impacted negatively on electricity generation in the past three months.

This had resulted in blackouts in many parts of the country, as well as reduced hours of power supply in some other locations in Nigeria.

Industry officials from the Federal Ministry of Power, Nigerian Electricity Regulatory Commission, as well as power generation and distribution companies told our correspondent that the highlighted issues stalled the proposed review of tariffs by the NERC.

In April, NERC announced that there would be a review of tariffs for Nigeria’s 11 power distribution companies in July.

It disclosed this in its notice of Minor and Extraordinary Review of Tariffs for Electricity Transmission and Distribution Companies, a development which stakeholders said might lead to a rise in the tariffs payable by electricity users.

The commission had explained that the extraordinary review was as a result of changes in inflation, foreign exchange, gas prices, available generation capacity and capital expenditure.

It said the Multi Year Tariff Order provided for minor reviews in every six months and major reviews in every five years.

But when asked on Thursday if the review of tariffs was held, an official of the power ministry, who spoke in confidence for lack of authorisation to speak on the matter, said, “There is nothing like that.”

The official added, “However I think the reason is because of the issue with power generation capacity in the past three months. And this is because of gas constraints to the gas-fired power plants.

“Also, the water level that supports hydropower plants has been very low, not until this month that it is gradually picking up. The water comes from the River Niger and it has been low.”

On whether any date had been fixed for a possible review soon, the source replied in the negative, stressing that it would, however, be made public whenever the decision was taken.

When contacted on whether power distributors were aware of any tariff review, the General Manager, Corporate Communications, Abuja Electricity Distribution Company, Oyebode Fadipe, also replied, “There is nothing like that.

“We don’t have any directive from the regulator saying we should adjust tariffs.”

On whether the commission provided any reason for not adjusting tariffs, Fadipe said, “There’s none. We have not been told to do anything. They did not need to give us any reason.

“There is nothing from anybody saying adjust tariffs. So the tariffs remain what they are. There has not been any directive about tariff review.

“If it was going to happen, we would have worked on it since yesterday and it would have taken effect, because it would have been effective July 1, which is today (Thursday).”

The power sector regulator also did not put up any notice or post on its website to show that it had reviewed tariffs or would do so any time soon.


Leave a Reply

Your email address will not be published. Required fields are marked *

Social Media Auto Publish Powered By :

Enjoy this post? Please spread the word