*Aba Power Limited Electricity requests the Nigerian Electricity Regulatory Commission to approval proposal for tariff increments, stating the current tariffs are no longer sustainable, impacting the company’s capacity to provide efficient and reliable electricity supply to consumers in its franchise areas in Abia State of Nigeria

Isola Moses | 绿帽献妻

Electricity consumers, Nigerian Electricity Regulatory Commission (NERC) and Aba Power Limited Electricity (APLE) are not on the same page in regard to apparent challenges facing consumers as the distribution company is seeking to increase electricity end-user tariffs to an average of N240 per kilowatt hour.

绿帽献妻 learnt Aba Power Limited Electricity officially, had requested to approve its proposal to jack up tariffs for electricity consumers in its franchise areas in Abia State of Nigeria by 123.33 percent, effective from January 1, 2025.

The power company made the request to the electricity regulator for an upward review during a NERC’s public hearing on the tariff review Tuesday, December 10, 2024, in Abuja, FCT.

However, the company’s proposal for electricity tariff increments has not gone down well with power consumers, report noted.

Firm鈥檚 proposed tariff increments at a glance

The company is proposing a tariff increase from N223.12/kWh in 2024 to N263.08/kWh in 2025 for band A-Non MD, 240.09/kWh in 2024 to N283.09/kWh in 2025 for band A-MD1, N245.20 in 2024 to N289.11 in 2025 for A-MD2.

The service provider also has proposed N213.74/kWh in 2024 to N252.03/kWh in 2025 for band B-Non MD, N233.13/kWh in 2024 to N274.89/kWh in 2025 for B-MD1, N237.71/kWh in 2024 to N280.29/kWh in 2025 for B-MD2.

For C-Non MD the company proposed N183.59/kWh in 2024 to N216.47/kWh in 2025, C-MD1 N207.06/kWh in 2024 to N244.15/kWh in 2025 and N208.89/kWh in 2024 to N246.31/kWh in 2025 for C-MD2.

Besides, in its presentation at the forum, Aba Electric Power Limited further stated the company’s service tariffs would increase from N148.14/kWh in 2024 to N174.67/kWh in 2025 for D-Non MD, N163.46/kWh in 2024 to N192.74/kWh in 2025 for D-MD1 and N148.14/kWh in 2024 to N174.67/kWh in 2025 for E-Non MD, N163.46/kWh in 2024 to N192.74/kWh in 2025 for E-MD1 and E-MD2 respectively.

APLE, owned by Geometric Power Group, is a ring-fenced distribution company that provides electricity to Aba metropolis, consisting of nine Local Government Areas (LGAs), in Abia State.

The company currently distributes electricity to 156,000 customers in its franchise areas.

The electricity company explained the current tariff is no longer sustainable, and is affecting its ability to provide efficient, reliable electricity supply to consumers.

Regulator, consumers react to service provider鈥檚 proposal for tariff increments

In reaction to the company鈥檚 presentation on proposed tariff hikes at the forum, electricity consumers and Nigerian Electricity Regulatory Commission and Aba Power Limited Electricity reportedly over challenges facing consumers as the distribution company seeks to increase electricity end-user tariff to an average of N240 per kilowatt hour.

In reaction to APLE鈥檚 request, Musiliu Oseni, Vice-Chairman of NERC, also reiterated the Commission鈥檚 commitment to balancing the interests of consumers and service providers.

Oseni stated: “The Commission would look critically at the parameters set by the company to arrive at the cost it proposed to ensure that customers benefit from it.

“So when your customers are happy, they will be willing to pay more to you, so that you can also improve on your operational performance. I think that aspect, we need to look at it critically.”

The Vice-Chairman of NERC further noted: “It鈥檚 quite good that you already concluded the process.

“Before we allow your cost to be passed on to the end user, we will have to look at it and see whether problems it might cause or otherwise.

Implications of tariff increases on power customers

Meanwhile, if the NERC approves the company’s electricity tariffs for non-maximum demand customers on Band-A feeder would rise from N99.9/kWh to N223.12/kWh.

The tariff for maximum demand (MD1) customers in Band-A would rise from N107.5/kWh to N240.09/kWh, while those in MD2 would pay N245.2/kWh instead of the current N109.79/kWh, report said.

Aside from this, in comparison to the tariff approved by NERC for other electricity Distribution Companies (DisCos), Aba electricity DisCo consumers would pay N35.7/kWh more than the consumers across the West African country, according to report.

The company reportedly justified the need for upward tariff adjustments for power consumers, arguing it did not benefit from the minor tariff review the NERC approved for other DisCos December 2022.

According to Aba Electric Power Limited, the tariff review is tenable.

It stated the company is meeting up with its operational cost amid apparent inflation impacting its business.

Still, it is believed the request for tariff hikes, if granted, is likely to increase the cost of living and doing business in the area.

Why we plead for NERC’s approval for electricity increments –CEO of APLE

Speaking during the hearing, Ugo Opiegbe, Managing Director of Aba Power Limited Electricity, explained the company’s operational cost has increased astronomically since its last tariff was granted.

Opiegbe argued the previous review pegged its tariff charge for Band Non-MD customers at N99.90KWh, which is below the bills it is receiving from electricity generation companies supplying its power.

The Managing Director said the fresh application for a tariff review would enable the company to recover its costs, and invest in improving the electricity infrastructure, which would ultimately benefit consumers

鈥淥ur request is based on the need to incorporate changes in macroeconomic parameters and indices which affect the quality of service, operations and sustainability of our company business.

“When we signed the PPA with the Niger Delta Power Holding Company sometime in 2022, NERC approved a tariff of N21KWh,” stated he.

Opiegbe also said: “Today, the last invoice we got from NDPHC was N136KWh.

“That鈥檚 the conundrum we have found ourselves in. That鈥檚 the major reason why we are here, pleading for NERC鈥檚 approval for this.

鈥淭he macroeconomic developments in the country have made it difficult for APLE to continue to operate under the current tariff regime.

鈥淭here are some Dollar-backed projects we are working on and which will be difficult to realise if we continue operating under the current tariff regime.鈥�

Stating that the consensus it generated from its customers indicated that tariff hike is not a major issue, he noted it is the availability of power, which the company is ready to provide when its tariff is increased to meet contractual obligations.

The company has proved its status as a reliable electricity provider, having invested in the generation and distribution of electricity to the customers it served.

According to him, infrastructure has been one of its hindrances in going completely off-grid to supply electricity to its franchise areas, but this would be solved in coming years when it gets its electricity from the Geometric Power Aba Limited, its sister company.

Opiegbe disclosed the current tariff has made the company incur over N26 billion debt to the NDPHC as its monthly invoice increased to N1.5 billion, which it can pay N500 million, while its invoice from GPAL is N1.2 billion which it paid N700 million.

NERC will balance interests of consumers, service providers, says Oseni

Restating the Commission鈥檚 stance on the company鈥檚 request for tariff increments, Oseni, Vice-Chairman of NERC, asserted the Commission鈥檚 commitment to balancing the interests of consumers and service providers.

He noted the Commission would look critically at the parameters set by the company to arrive at the cost it proposed to ensure customers are exploited, report stated.

The Vice-Chairman of NERC also stated: “The Commission would look critically at the parameters set by the company to arrive at the cost it proposed to ensure that customers benefit from it.

“So when your customers are happy, they will be willing to pay more to you, so that you can also improve on your operational performance. I think that aspect, we need to look at it critically.”

Oseni said: “It鈥檚 quite good that you already concluded the process.

“Before we allow your cost to be passed on to the end user, we will have to look at it and see whether problems it might cause or otherwise.

“This hearing is part of our effort to ensure that any tariff review is fair and reflects the realities on the ground.

“We will carefully review the submissions made here today before making a final decision.”

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