The Senate has urged President Bola Tinubu’s government to stop its planned electricity tariff increase via the planned withdrawal of electricity subsidy.
Senate has urged President Bola Tinubu’s government to stop its planned electricity tariff increase via the planned withdrawal of electricity subsidy.
The upper legislative chamber made the call through a motion it adopted at plenary on Wednesday in Abuja.
The motion was captioned, ‘Planned Increase in Electricity Tariff and Arbitrary Billing of Unmetered Customers by Distribution Companies (DisCos)’ and brought under matters of urgent public importance, sponsored by Aminu Abbas (PDP-Adamawa) and 10 co-sponsors.
Mr Abbas said it was worrisome to hear of the plan by the relevant statutory authority to increase electricity tariffs despite increased economic challenges with attendant widespread poverty and the high cost of living in Nigeria.
He claimed that the power minister was reported to have said that the nation must begin to move towards a cost-effective tariff model, as the country was currently indebted with N1.3 trillion to generating companies (GenCos) and $1.3 billion owed gas companies.
According to Mr Abass, the minister had said that more than N2 trillion was needed for subsidy, but only N450 billion was budgeted in 2024.
“The Senate may further note that the same electricity businesses are collecting money from customers for services not rendered. When they have not added anything to the equipment, they inherited from the Power Holding Company of Nigeria.
“Communities buy transformers to replace damaged ones in addition to overburden bills and arbitrary estimates for unmetered customers. This is taking place in a country where the greater number of the population is living below the poverty level, with stagnant wages. Rising inflation and depreciating currency, the prospect of higher electricity bill is unattainable,” Mr Abbas said.
He said arbitrary energy charges on unmetered customers had become worrisome given the February 2024 report of the Nigerian Electricity Regulatory Commission (NERC) on non-compliance with energy billing caps by DisCos and a penalty of N10.5 billion imposed on DisCos that over-billed its unmetered customers.
Mr Abbas said in 2020, the then-president ordered NERC to commence mass prepaid metering to end estimated billing, saying that funds were released to that effect.
He said it was worrisome that the multiple sanctions declared to be imposed by NERC against DisCos for failing to comply with the eradication of estimated billing for unmetered customers, which included credit adjustments to overbilled unmetered customers for the period Jan– Sept 2023.
He said the March 2024 billing cycle, publication of the list of credit adjustment beneficiaries in two national dailies, indicates a deduction of N10.5 billion from the annual allowed revenues of the eleven DisCos during the next tariff review.
He said this seemed to have been in futility, given the continued violations by DISCOs.
He expressed reservations that in addition to the high cost of living experienced in the country, the unmetered customers who are owners of small and medium enterprises were adversely impacted by the level of exorbitant electricity charges and, by implication, had their businesses affected.
In its further resolution, the Senate mandated the committee on power to investigate the over N2 trillion subsidy requirements as stated by the Minister of Power to avoid the repeat of the fuel subsidy scenario.
It also mandated the committee to investigate the statement made by the minister with regards to the N1.3 trillion the ministry was said to owe the GenCos and $1.3 billion owed gas companies.
It also urged the committee to investigate the role of the power ministry, NERC and Ziglaks Company on their roles in the failed agreement to provide prepaid meters and ensure Nigeria is not shortchanged.
It also urged the committee to engage the NERC to develop a lasting solution to the energy billing system and other related issues.
The Senate urged the committee to find out the truth on the issue of the federal government directive, release funds for mass pre-paid metering, and report findings to it.
It also urged the committee to enforce and ensure the judicious utilisation of the N10.5 billion penalty imposed on DISCOs. It further called for an investigation of DisCos’s operations to ascertain the current status of metering and their extent of compliance with relevant legal and regulatory frameworks in service delivery.
The Senate directed NERC to furnish the committee with relevant documents on the metering of electricity consumers, post-privatisation requirements for the operation of DisCos and evidence of regulatory actions taken to ensure statutory compliance by DisCos.
The Senate also directed NERC to ensure the implementation of energy caps by all DisCos to unmetered customers in the country. It further directed its committee to submit a comprehensive report for further legislative action.
