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FG says no electricity tariff increase for poor, vulnerable Nigerians, gives conditions for increase

DISCOs have been given conditions under which electricity tariffs can be reviewed and increased.

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The Federal Government has disclosed that poor and vulnerable Nigerians will not be experiencing any electricity tariff increase. The clarification is in response to a media report of an increase in electricity tariffs in Nigeria. It also asked the general public and stakeholders in the power sector to disregard any report of an arbitrary tariff increase.

The disclosure was made by the Nigerian Electricity Regulatory Commission (NERC) through a press statement that was issued on Wednesday, August 27, 2020, and signed by its Executive Chairman, James Momoh.

NERC revealed that electricity tariff reviews, going forward, will only follow service-based principles. Under these principles, Electricity Distribution Companies (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 have been directed to engage with their customers on a Serviced Based Tariff structure, where DISCOs can only review tariffs for customers under the following conditions:

  • Customers are consulted and communicated a guaranteed level of electricity service by the DISCOs based on hours of supply.
  • Customers are metered.
  • No estimated billing through the strict enforcement of the capping regulation. This means that unmetered customers will not experience any cost increase beyond what is chargeable to metered customers in the same area.

Going further, NERC disclosed that even under the above stated conditions, 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.

The President has also approved a waiver of the import levy on meters so that those who do not have meters can be supplied as early as possible at reasonable costs.

Themoneymetrics, while quoting a media report, stated that President Muhammadu Buhari had approved electricity tariff increase with effect from September 1, 2020. The report suggested that the President may have finally approved the official implementation of cost-reflective tariffs for the Nigerian Electricity Supply Industry, with the tariff now set to go live on September 1, 2020.

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ENERGY

FG commences construction work on 50MW gas plant in Maiduguri

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The Federal Government through the Nigerian National Petroleum Corporation (NNPC) on Thursday commenced the construction of a 50 megawatts gas power plant for the supply of electricity to Maiduguri and environs.

The construction of the plant which is an emergency power project was approved by President Muhammadu Buhari.

According to NAN, this followed the sustained attack on power supply lines (330 KVA and 132 KVA lines) from the National grid to Maiduguri by suspected terrorists which have put the city and environs in total blackout for the past 9 months.

While performing the groundbreaking ceremony in Maiduguri, the Governor of Borno State, Babagana Zulum, said the project would be executed by the NNPC in collaboration with Chinese and American firms.

Zulum said that the project would bring significant relief to the people of Borno state and expressed gratitude to the Federal Government under the leadership of President Buhari for approving the construction of 50 megawatts power plant which is the first of its kind in the history of the country.

He said the plant would impact positively on socio-economic activities of the state which has been crippled by the destruction of electricity towers by the insurgents.

He assured residents of the commitment of his administration to work with all stakeholders to ensure the successful completion of the project in the stipulated 6 months time frame.

He expressed the appreciation of the government and people of Borno to Buhari and NNPC for the sustained concern and support to the people of Borno.

Speaking at the occasion, the Group Managing Director of NNPC, Mr Mele Kyari, gave the assurance that the project would be delivered in good time and has already awarded the contract to General Electric Global for the supply of gas turbine.

Kyari said orders have already been placed for turbine and other facilities for the project.

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ENERGY

Power: Nigeria committed to electrifying 5 million households – Buhari

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President Muhammadu Buhari said the Nigerian Government is committed to electrifying 5 million households in Nigeria under the Energy Transition Plan.

President Buhari disclosed this at the 76th United Nations General Assembly in New York, highlighting Nigeria’s role as a Global Theme Champion for the Energy Transition.

“Nigeria’s commitment to a just transition is reflected in our ambitious Energy Compact, which includes the Government’s flagship project to electrify five million households and twenty million people using decentralized solar energy solutions,” Buhari told the UN General Assembly.

He added that it is a major first step towards closing Nigeria’s energy access deficit by 2030 and called for support from developed countries to unlock the finance needed to accelerate a just energy transition for all.

“Nigeria’s commitment is also reflected in the development of our Energy Transition Plan, which was developed with support of the UK COP26 Energy Transition Council.

“The focus of our discussions on transition must now involve how we help countries develop detailed energy transition plans and commitments to mobilize enough financing to empower countries to implement those plans,” President Buhari said.

He added that Nigeria’s electricity generation plan needs major financing that amounts to over US$ 400 billion over the next 30 years.

“This breaks down to US$ 155 billion net spend on generation capacity, US$ 135 billion on transmission and distribution infrastructure, US$ 75 billion on buildings, US$ 21 billion on industry and US$ 12 billion on transport.”

He highlighted the importance of Natural gas towards Nigeria’s electricity needs stating that it is “imperative that I flag a major risk to development that stems from the current narrative around the energy transition, particularly on the role of gas and the lack of financing.

“Nigeria’s Energy Transition Plan has laid out our roadmap to reach net-zero and highlights the scale of the effort required, which includes the development and integration of renewables into current grid infrastructure at tremendous scale and electrification of all sectors.

“This is challenging for any country, especially a developing country. On our development objectives, gas will have a key role to play here for some years before being phased out,” he said.

What you should know

Recall It was reported recently that the Nigerian electricity sector, classified with gas, steam and air conditioning supply recorded a 78.16% year-on-year real GDP growth in the second quarter of 2021, by far the highest growth rate record by any sector in the review period.

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ENERGY

NNPC set to declare first dividend to Nigerians

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The Nigerian National Petroleum Corporation (NNPC) has announced that it will declare its first dividend to Nigerians as it prepares to release its 2020 financial statements in the third quarter of this year.

This is coming at a time the Federal Government is planning to commercialize and privatize the operations of NNPC for better efficiency and to put it on a bigger global stage.

This was disclosed by the Group Managing Director of NNPC, Mele Kyari, while delivering an address at the opening ceremony of the Nigeria Annual International Conference and Exhibition organised by the Society of Petroleum Engineers, on Monday in Lagos.

What the Group Managing Director of NNPC is saying

Kyari said, “Everything we are doing must align with the wider national interest. And therefore, NNPC, being the representatives of all of us and, is, of course, a very potential global player – this is our ambition and we are getting there.

“And I can tell you, within the next month or two maximum, we will publish our statement of accounts for 2020. And I can also confirm to you that for the first time in our history, we will declare dividend to the Nigerian people.”

Kyari said the state oil giant is expected to play a key role in the global transition to low carbon energy in the near future. He pointed out, “Our tremendous natural gas reserves have become our greatest enabler to smooth transition to low carbon energy. We are deepening natural gas utilisation under the national gas expansion plan to earn more carbon credits and create a net zero carbon environment in line with our drive to becoming an energy company of global excellence.’’

Details later…

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