Amid calls that the Band A tariff hike be reversed, the Nigerian Electricity Regulatory Commission has approved a new tariff hike for the Port Harcourt Electricity Distribution Company.
The NERC permitted the PHED to raise tariffs for Band A
customers categorised as Maximum Demand 2 Special (A – MD2 Special).
MD customers are customers that have a load of 45kVA and
above. They also operate and maintain their dedicated transformers.
From N206 per kilowatt-hour, this category of customers
within the Port Harcourt franchise will now pay N225/KWh.
In a regulatory instrument tagged June 2024 Supplementary
Order to the Multi-Year Tariff Order – 2024 (“June 2024 Supplementary Order”)
for Port Harcourt Electricity Distribution Plc, the NERC said the tariff
approval was under the Tariff Review Application by PHED.
“Further to Section 23 of the MYTO-2024, this Supplementary
Order seeks to reflect the changes in the pass-through indices outside the
control of licensees including inflation rates, naira/dollar exchange rate,
available generation capacity and gas price for the determination of
Cost-Reflective Tariffs,” the NERC stated.
Emphasising the basis for the review, the regulator stated
that the Naira to the US Dollar exchange rate of N1,469.06 per dollar has been
adopted for June to December 2024; saying this has been determined by adding a
1 per cent transaction cost to the average foreign exchange rate of N1,454.52
during the period May 1 to 24, 2024 as obtained from the website of the Central
Bank of Nigeria.
It also added that the Nigerian inflation rate of 33.69 per
cent for April 2024 as published by the National Bureau of Statistics was
applied to revise the Nigerian inflation rate projection for 2024.
“Under Section 116 of the Electricity Act and extant
regulations, the commission has considered and approved for PHED, the tariffs
(in Table 2) effective 1st June 2024. The approved tariffs shall remain in
force subject to monthly adjustments of pass-through indices including
inflation rates, naira/dollar exchange rates and gas-to-power prices.
“In line with the policy direction of the Federal Government
of Nigeria on electricity subsidy, the allowed tariffs for Bands B – E customer
categories shall remain frozen at the rates payable since December 2022 subject
to further policy direction by the government.
“With this policy, the estimated subsidy benefit for
customers under the PHED franchise in 2024 is approximately N11.49bn monthly,”
the NERC stated.
In April, the NERC announced a new tariff for customers in
Band A, from N68/KWh to N225/KWh.
It later reduced the tariff to N206.80/KWh based on the
rebound of the naira.
Meanwhile, organised labour and manufacturers have kicked
against the Band A tariff.