FEDERAL GOVERNMENT UNVEIL PLAN TO REGULATE ELECTRICITY TARIFF.

FEDERAL GOVERNMENT UNVEIL PLAN TO REGULATE ELECTRICITY TARIFF.

The Federal Government has unveiled plans to standardize electricity tariffs in order to rectify existing disparities in the billing system and stimulate investment in the power sector.

During the public presentation of the National Integrated Electricity Policy and the Nigeria Integrated Resource Plan held on Thursday in Abuja, the Minister of Power, Adebayo Adelabu, highlighted the intention behind this initiative. He noted that the slow transition to Band A customers is partly due to Distribution Companies (DisCos) being hesitant to make the necessary investments.

Currently, customers in Band B, who receive 17 to 18 hours of electricity, are billed at 63 Naira per kilowatt-hour, while those in Band A, receiving just two additional hours, are charged 209 Naira per kilowatt-hour. Adelabu called this pricing structure “unfair” and emphasized the importance of regularizing tariffs to establish a more equitable pricing framework.

He stated, “We will reevaluate the tariff. I’m not suggesting that there will be an increase in fees to avoid any misinterpretation.” He added that the intention is to enhance the sector’s growth and to increase investments aimed at refurbishing aging infrastructure.

Adelabu expressed concern over the slow migration to Band A, attributing it to the DisCos’ refusal to invest in the sector, which is necessary for facilitating faster transitions for lower-band customers. He pointed out that substantial investments are required for this purpose, as the process has been prolonged.

In light of these issues, the government is contemplating a restructuring of the tariff bands to narrow the current disparities. The proposed approach would involve adjusting the rates of Bands A, B, and C to address these inequalities.

“The difference between Band A tariffs and those in Bands B, C, D, and E is excessively broad,” he remarked. “This situation is unjust, and we must implement some form of regularization.”

Adelabu reassured the public of the government’s dedication to reviewing the current tariff structure, clarifying that this review does not necessarily mean there will be an imminent increase in rates.