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Should Nigerians pay more for electricity?

Finally the D-Day is here, Monday, February 1st. The date all electricity consumers in the country are expected to adopt if you like, a new payment regime as announced by the Minister of Power, Works and Housing, Babatunde Fashola.

The new payment policy will however not include service charge anymore as was the case before, but Nigerians are expected to pay more this time.

Groundswell of opposition against new tariff
The new policy regime is coming in spite of a subsisting court order for all parties to stay action.
It may be recalled that Barrister Toluwani Yemi-Adebiyi, a human rights activist, had taken the Nigeria Electricity Regulatory Commission (NERC), to court and subsequently got an order from the Federal High Court in Lagos to stop the NERC from further increasing its tariff. The injunction granted by Justice Ibrahim Idris against any increment was subsisting and had not been discharged.

“The extended labour unions, including the Nigerian Labour Congress (NLC) and Trade Union Congress (TUC) have set machinery in motion to picket the offices of the electricity distribution companies (DISCOs) nationwide on Monday (today).”

Justice Idris made the order on May 28, 2015 restraining NERC from increasing tariff in June. The judge later restated the order, saying it subsists until the substantive matter is decided.
The House of Representatives had also kicked against the new tariff, just as the organised labour said it was unacceptable.
In fact as an indication of their opposition to the whole idea, the extended labour unions, including the Nigerian Labour Congress (NLC) and Trade Union Congress (TUC) have set machinery in motion to picket the offices of the electricity distribution companies (DISCOs) nationwide on Monday (today).
At a stakeholders’ meeting convened in Lagos over the weekend, the NLC president, Comrade Ayuba Wabba and his counterpart at TUC, Comrade Bobbi Kagama, and Messrs Adeola Samiel-Ilori, Coordinator, Electricity Consumer Protection Forum, Toluwani Yemi-Adebiyi, a human right activist and Chinedu Bosah, Publicity Secretary, CDWR had described as illegal, unfair and unjustifiable a further exploitation of the already exploited Nigerians the intention to increase electricity tariff come February 1st, 2016.
Justifying the need for the rejection of the new tariff, they said due process was not followed in line with Section 76 of the Power Sector Reform Act, 2005.
Besides, they said there has been no significant improvement in service delivery just as they accused the DISCOs of reneging on the memorandum of understanding in which the latter promised to provide meters to all electricity consumers but failed to do so.
Subsequently, they hinted that the labour unions will as a matter of necessity mobilise all Nigerians to resist the new tariff by embarking on mass protest and picketing of all DISCOs’ offices nationwide.

“Labour said there has been no significant improvement in service delivery just as they accused the DISCOs of reneging on the memorandum of understanding in which the latter promised to provide meters to all electricity consumers but failed to do so.”

“We direct all consumers to reject any bill with the new tariff and so many other actions we may deem necessary.”
Forcing a fait accompli on Nigerians
It does appear the federal government has already considered the new policy regime as a fait accompli judging by the preparedness of the electricity’s distribution companies (DisCos) to go ahead with the implementation.
Speaking under their umbrella body, Association of Nigerian Electricity Distributors (ANED), the DISCOs said power consumers’ cooperation have become imperative so as to ensure a hitch free service delivery.
ANED Executive Director, Research and Advocacy, Sunday Oduntan urged the customers to pay their electricity bills for the growth of the power industry and the economy.
Nigerians, he lamented, only pay for 40 per cent of electricity supplied, a situation, he admits, creates grave financial constraints for the entire value chain.
“There is a culture of non-payment for electricity in Nigeria, maybe as a result of attitude of past governments. This attitude cuts across all the geographical regions. We pray our customers to endeavour to pay their bills,” he stressed. Nigerians, he emphasised, waste energy instead of conserving.

“Leaving our security lights on when unnecessary is injurious to the system and the economy. Currently, we have less than a quarter of what the nation requires in terms of power supply, so it is important that customers pay promptly.”
While attempting a comparative analysis of what obtains within the continent, he said Chad has the highest tariff, while Zambia has the lowest followed by Nigeria.
According to Oduntan, of the new tariff, 60 per cent of the total money collected goes to the generation companies that in turn, pay the gas suppliers, while 11 per cent goes to the transmission company, four per cent to the regulator, bulk trader and market operator.

“The new tariff will see some residential customers paying between N4 and N41.31 per kilowatt/hour or a little more depending on consumption and DISCOs of the customer. But customers that are expected to pay N4 are those in rural areas.”

The distribution companies get 25 per cent, but because the customers only interface with the DisCos, the distribution firms bear all the blames.

He noted that in line with the multi-year tariff order (MYTO), the tariff will go up in two years and after that, it will start to come down from the third year. By the time we get to the eighth year, it would have come down drastically, as investment in the sector would have been reasonably recouped.
The new tariff will see some residential customers paying between N4 and N41.31 per kilowatt/hour or a little more depending on consumption and DISCOs of the customer. But customers that are expected to pay N4 are those in rural areas.

However, average residential customers will be charged N24 per unit, a little more less depending on the DISCOs, while commercial and industrial customers will pay between N27 and N50 per unit on their consumption rate.

Shape of things to come
As an indication of the shape of things to come, the organised labour has drawn the battle line and has hinted of plans to picket the DISCOs nationwide beginning from Monday, even as the DisCos remain adamant, insisting that the new tariff must take effect.

So, between labour and the DISCOs who will back down, or will there be a middle ground?
Will Nigerians have to pay more for electricity, or will labour succeed in making the DisCos bring the price of the product Nigerians hardly enjoy?

The answers are in the womb of time.

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