Thursday, 17 September 2015

Vice President, Yemi Osinbajo intervenes in Power Over plan to increase electricity tariff.

Presidency intervenes Over plan to increase electricity tariff.

The Presidency has intervened in the face-off between electricity distribution companies and their customers over the planned tariff hike. The Chief Executive Officer (CEO) of Ikeja Electric, Mr. Abiodun Ajifobaje, disclosed this at a forum in Lagos.

 He said that the Vice President, Yemi Osinbajo, met with investors and owners of assets in the power distribution subsector.

In a statement made available to New Telegraph, he insisted that Nigeria “do not have a cost reflective tariff.” The distribution companies and their customers had earlier been locking horns in litigation over the plan to increase electricity tariff.

Ajifobaje said: “Due to crisis of litigation against the proposed tariff review, we have met with the Vice President, Mr. Yemi Osibajo, on the issue. The Vice President has called on Discos to go and negotiate with consumers and come back with good reasons for the tariff review. The Ikeja Electric helmsman stated that the forum was designed by the Nigerian Electricity Regulatory Commission (NERC) to determine new tariff structure.

“Instead of NERC to fix the new tariff for electricity consumers, the distribution companies (Discos) now consult consumers and come back for approval,” he said. He described the Discos as daily collectors, adding that the bulk of the monies collected went to Generating Companies (Gencos) and the Transmission Company of Nigeria (TCN). Ajifobaje said: “Out of every N100 collected from our consumers, only N15 goes to our pocket.

“We pay N65 to Genco and N15 goes to TCN, while others like NERC will share N10; we are only left with N15 out of which we pay our workers’ salary and replace faulty equipment.

“Because we do not have a cost reflective tariff, most of the Discos have not even paid the other chain.” He urged consumers within the zone to be objective in dealing with the issue, adding that it would be difficult for the company to obtain loan from banks if they did not have cost reflective tariff.

The statement said that the Director, Association of Nigerian Electricity Distributors (ANED), Mr Olurotimi Oduntan, noted at the forum that energy was being subsidised by the Federal Government before it was privatised. It said that there were gaps in the business because they were still operating the last tariff based on exchange rate of N158 per dollar while a dollar was around N200. It said that due to the current tariff structure, Discos were not making any profit and if things continued, the power business might collapse.