Electricity Consumers Seek Reversal Of Tariff Increase

Electricity Consumers Seek Reversal Of Tariff Increase

A groundswell of opposition by electricity consumers, on Wednesday, trailed the commencement of a new electricity tariff regime by Electricity Distribution Companies (DisCos).

Most of the aggrieved consumers under different categories of the newly hiked tariff, who spoke with The Nation, lamented the unbearable hardship the new tariff increase will have on their lives and businesses and therefore, called for a reversal.

For instance, a customer, who simply identified himself as Sir. Ellams Umogane, in Kuje Area Council in Abuja, lamented that the hike was unbearable.

He said “No matter the relief they said the poor would get from this tariff increase, it is unfair because power supply is still epileptic.” He wondered why the DisCos should increase the rate before improving the supply.

Another customer in Kubwa Area of the Federal Capital Territory (FCT), John Bacon, said it was deceptive to say the bill would not affect the poor. According to him, “I used to buy 38.3 units for N1000, but the same amount could only give me 20.4 units this morning (Wednesday).

“How much do I earn in a month? Does Abuja DisCo give me up to 12 hours electricity supply daily?” Bacon asked.

A resident of Logo 1, Ahule, a suburb of Makurdi, Benue State, Donald Kuma Icheren, also lamented that he and other electricity consumers hardly enjoy one week power supply in their settlement and wondered why there is tariff hike, especially at this time of COVID- 19.

Icheren expressed concern that the only transformer in the area is over loaded and hardly served residents of the area.

He said rather than tariff hike, Jos Electricity Distribution (JED) should put more efforts towards improving on infrastructure like transformers, new poles, cables and installation of prepaid meters for consumers.

Also, Hajiya Ganiyat Ogunyemi-Balogun, a residential customer in Pyakasa-Lugbe, said she was yet to buy units under the new rate, but insisted that the energy distributor has no justification for any hike. She said the government had put the cart before the horse.

Her words: “Why increase tariff before supply, even when there is no meter. Most government policies are anti-people. I feel cheated by this pronouncement, which makes government insensitive to the plights of Nigeria.

“I foresee energy theft because many people are struggling with the adverse effects of the COVID-19 pandemic. Besides, if customers have no meters they could take to energy theft.”

Similarly, Alhaji Lukman ldris a sachet water producer in Magboro, a border community in Ogun State, lamented that the increase in electricity tariffs will further compound the pains of Nigerians.

Hear him: “It is unfair. What is the reason for the increase? Presently, power supply is epileptic and we still pay, but any attempt to increase the rate will further worsen the situation. Our bottom line has already been eroded by fuel and diesel consumption on a daily basis.”

For Mrs. Paul- Ndukwe, a school proprietor in lsolo area of Lagos, “Increase in electricity tariffs at this moment is pure robbery, particularly for us who don’t have pre-paid meters. Even at the moment, we’re not getting service for what we’re paying now. Seriously, any increase will do a lot of damage to businesses.”

A provision shop owner in Arepo, Ogun State, Mr. Uche Peter, also decried the hike in tariff, noting that it would affect the price of goods and services and the economy.

“At the moment, I pay close to N7, 000, and it’s quite a heavy burden on my small business. To increase it again will not only inflict more pain on my strained income, but also on my workers,” he said.

Uche also complained that the meter the government and DisCos promised to roll out has not been issued to customers. “Because they are getting so much money from estimated billings. We don’t know who will rescue us from these power utility companies. Now they have increased the tariff again,” he said.

Stating that the tariff increase was unnecessary, a retired nurse, Mrs. Lucy lfejika, said Nigerians were already overstretched and overburdened by the estimated billing.

She said rather than increasing the tariff, DisCos roll out enough prepaid meters to consumers so that at least, consumers can pay for whatever they consume.

“What we have is a situation where Nigerians are paying through the nose for irregular power supply. This is not the right time for electricity tariff increase. It is an additional burden on consumers,” lfejika said.

The timing of the increment also did not go down well with Dr. Lukman Raimi, a Senior Lecturer at the American University of Nigeria (AUN), who described the increase as “ill-timed,” citing the bad situation caused by the pandemic.

Raimi admitted that the government may be helpless in taking the decisions, but he said they should have waited till next year before hiking the electricity tariff.

“With the increases, food prices will go up. The cost of transportation, which is already unbearable, will also go up and will have a multiplier effect on the economy. It will lead to unnecessary inflation,” he said.

The university don urged the government to halt the electricity tariff hike to reduce the hardship the masses are facing already.

The President, Association of Capital Market Academics of Nigeria, Prof. Uche Uwaleke, also condemned the hike in electricity tariff, insisting that its timing was wrong.

“But for the timing, I would have welcomed it whole heartedly. Amidst COVID-19 and its negative impact on firms and households’ pockets, Nigerians will have to grapple with increase in Value Added Tax (VAT), pump price of fuel, exchange rate and now electricity tariffs,” he said.

Prof Uwaleke, who is also Chairman, Chartered Institute of Bankers of Nigeria, Abuja Branch, said while he supports “a cost reflective tariff structure for the electricity sector that promotes private investments,” “the effective take off date should be deferred till Q1 of 2021.

The Director General, Lagos Chamber of Commerce & industry (LCCI), Dr. Muda Yusuf, agrees with Uwaleke on the need for a cost reflective tariff structure for the electricity sector. He said that for Nigeria to get investments in the energy sector, she can’t run away from cost reflective tariff.

While insisting that a cost reflective tariff was inevitable, the LCCI chief told The Nation that the only alternative is to classify electricity provision as social good, which only the government could provide or subsidize.

Listen to him: “It is important to inspire the confidence of electricity consumers through a robust metering programme and guarantee of value for money. Cost reflective tariff is a difficult option, especially given the prevailing economic conditions. But it is the most sustainable option that would salvage the power sector and attract investment.”

Yusuf, however, stressed the importance of fixing the numerous inefficiencies that characterize the entire power sector value chain for the new policy to make impact.

Calls For Reversal Heighten

While a cost reflective tariff may be the way to go, according to Yusuf and other experts, most electricity consumers have kicked their heels in, insisting that the electricity tariff hike, which kicked off on Tuesday, September 1, should be reversed.

For instance, the Director, Movement for a Socialist Alternative (MSA), Mr. Demeji Macaulay, said: “The association condemns the recent hike in electricity tariff in strongest terms and demands its immediate reversal.”

He condemned the tariff increase in spite of the resolution of the Senate and direct orders by President Muhammadu Buhari to shelve the plans by the DiSCos to hike electricity tariff “until all consumers are metered”.

“This increment policy direction will not guarantee affordable tariff and stable power supply for the vast majority. It is only massive public investment in the power sector combined with the nationalisation of the electricity sector and other commanding heights of the economy that can guarantee affordable and uninterrupted electricity,” Macaulay said.

A 30 year old wielder, Paul Chukwu, also appealed to the Federal government to put on hold the electricity tariff hike until there is 100 percent improve power supply.

Chukwu stated that presently, he has provided poles, bought cables before officials of Jos Electricity Distribution (JED) step down electricity for his welding business. Even at that, he only enjoyed electricity in night time and had to wait until hours into midnight to carry out wielding works.

The President, Nigeria Consumer Protection Network, Mr. Kunle Olubiyo, said on behalf of electricity consumers, the Association had been engaging the Federal Government on the impact of the electricity tariffs on the poor and vulnerable people.

Olubiyo said the association had received assurances from the highest level of government that the present tariffs adjustment would raise the bar of minimum remittance to be made by the DISCOs.

“And as the names implied, the service reflective tariffs broken down into different bands, segments is not targeted at the poor and at the same time it is more or less designed technically speaking to serve as “cross subsidies” Olubiyo said.

Cross-subsidies involve a group of consumers paying more than the general cost of supply and the surplus is used to subsidise the provision to the other group at a price that is lower than the cost of supply to the subsidised group.

The Nigerian Electricity Regulatory Commission (NERC) on Aug. 27 said electricity tariff reviews, going forward will only follow service-based principles.

Under these principles, DiSCos will only be able to review tariff rates for customers when they consult with them and commit to increasing the number of hours of supply per day and quality of service.

NERC stated that in line with these expectations, DisCos had been directed to engage with their customers on a Serviced Based Tariff structure, where DisCos could only review tariffs for customers.

Going further, NERC said there will be no tariff change for the most vulnerable as tariffs for those consuming 50KW or less remain frozen.

Also, customers receiving less than 12 hours of power supply are expected not to experience any change in tariffs.

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