Lower electricity tariffs’ll come, power firms tell consumers

Following the announcement by labour unions to stage protests in different parts of the country against the hike in electricity tariffs today (Monday), the power distribution companies have urged consumers to remain calm as the bills will be eventually be reduced as power generation increases.

Last week, the Nigeria Labour Congress, Trade Union Congress and other labour groups served the protest notice against the over 45 per cent hike in electricity tariffs approved by the Nigerian Electricity Regulatory Commission for the power distribution firms.

But the firms, in a statement issued by the Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Mr. Sunday Oduntan, said the grievances against the sector should not be transferred to the operators, who had put their investments at risk.

He explained that the recent increase in power generation to over 5,000 megawatts and a continuous rise in generated electricity would lead to more investments and reduced tariffs, stressing that a revived power sector would hurt some businesses that depended on a moribund industry to thrive.

Oduntan said, “The increase in power generation will help to mitigate the negative cash-flow and revenue shortfalls that have bedevilled the sector since the handover of the assets to private operators, and hindered the ability of the generators to increase supply due to their inability to pay gas suppliers.

“The good news is that with the increased investment that will occur as a result of the ability of the operators to generate a credible cash-flow that will provide them with access to financing for investment in distribution, generation and transmission infrastructure, the cost of electricity supply and distribution will be reduced.

“This reduction, as a result of increased investment and efficiency gains, will result in lower tariffs for electricity customers. This projection is consistent with similar electricity reforms that have taken place all over the world. It is empirically supported.”

Oduntan, however, stated that the increase in power generation had constrained the wheeling capacity of the Transmission Company of Nigeria due to lack of access to revenue for the rehabilitation, replacement and expansion of the country’s grid infrastructure.