NERC set to review power tariffs

By Oke Peter

The Nigerian Electricity Regulatory Commission (NERC), on Thursday stated that it would take another look at tariff computation in order to address the various concerns surrounding the issue.

According to NERC’s newly inaugurated Chairman, Professor James Momoh, all necessary calculations on electricity tariff will be done by the commission to get the right amounts to be paid by power consumers across the country.

Momoh, who was confirmed by the Senate on April 17 this year after his nomination by President Muhammadu Buhari, spoke on the sidelines of his inauguration by the Minister of Power, Works and Housing, Babatunde Fashola, at the ministry’s headquarters in Abuja.

The NERC boss stressed that power tariff challenges were solvable, adding that his team would use lessons learnt in the past to address the problems confronting the sector.

He said, “If we are able to teach people to know why things go wrong, perhaps we will learn from our mistakes. We will look back and use lessons learnt yesterday to solve tomorrow’s problems. We must begin to anticipate problems so that we can provide solutions. The tariff is just an example. It is not a challenge that you cannot solve.

“It happened, you learnt something about it last week; so, you don’t have to re-learn the same lesson today. We should be able to ask questions to avoid the problem. We have something called data science – the new thinking in the world, where we have idea of you collecting data, you learn from the information and you predict the future. If we don’t do that, we will be wasting our time.”

When asked if his team would look at the tariff issue, which had dragged on for years, Mommoh replied, “We have no choice, we have to look at what computes a tariff. It is not a guess work; there is a calculation you do to get there; so, that is an idea.”

Over the years, there have been divergent views on the review of electricity tariffs, a development that made the power sector to witness about six tariff review suspensions since the industry was privatised in November 2013.

For instance, in January 2015, the reviewed electricity tariff for the Residential 2 customer class was suspended in order to cushion the impact that an increase in tariff would have on consumers.

Industry operators at the time blamed the six-month tariff freeze on political considerations, while the Multi Year Tariff Order 2015 that was signed in December was also suspended in January 2016 by NERC. It, however, came into effect in February 2016 after protests by industry operators.

Commenting on what he intends to do in the power sector, the new NERC chairman declared that he knew why electricity generation companies often experienced blackouts, adding that he was ready to help address the situation.

Momoh said, “I brought with me the knowledge and experience that I have about power engineering and, of course, the ability to work in teams and to address quick wins – what can we do with respect to what we heard about estimated metering, how do we make sure that we get enough data so that customers are also convinced to pay for the power they use based on what we provide.

“At the same time, we will bring the best practices to ensure that we have quality supply and reliable power. What we bring is also to ensure that there is innovation in the industry, because if we remain the same and remain static and not solve real problems, we will just be doing a fire brigade thing.

“The Gencos will tell you there is a blackout without knowing why. We are going to ask the questions. For me, I know why, because I know the mathematics and economics behind it.”