There are indications that electricity consumers on Band B may soon pay more as the Minister of Power, Adebayo Adelabu stated that they are not paying enough for the electricity they receive.
The minister who was speaking at the Public Presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) yesterday in Abuja, said the difference between what Band B, which gets a maximum of 18 hours and Band A which get a minimum of 20 hours is too wide, saying there is the need for a regularisation of the bands.
He added that the government had thought the migration to Band A would be faster, but it found out that DisCos refused to invest in their networks.
“They have refused to invest in this sector. Fine, it can be explained in a way, but a lot of investment is required for us to achieve an accelerated migration of lower band customers into Band A. It is taking a lot of time.”
“We’re now not looking, okay, what can we do? Let’s even look at other bands, which is B to E. Let’s go now to the bands to A, B, and C, so that we can actually, because the gap between the Band A tariffs and the Band B, Band C, D, and E is just too wide. It’s just too wide. And a Band B that’s enjoying 18, 17 hours is paying N63.
“One that’s enjoying just 20 hours, two hours difference of supply, is paying N209. So we believe it’s not fair. It is not just. And we must be able to carry out some level of regularization.”
He added that this is not tariff increase, because tariff would never go beyond what a Band A is paying.
“But we need to regularize, internal regularization of the tariffs among the existing bands. Try to be fair, it will be just, and it will come with minimal noise because a lot of Band A customers will say, downgrade us to Band B. If Band B can be getting 16, 17 hours. Then they also pay something close.”
“Nobody will come and say, ‘downgrade me to Band B again’. So we are just trying to juxtapose the numbers and also engage. We are not announcing any increase in lower band tariffs yet. If we want to do that, everybody will be carried along. I want to do proper engagement, and we know that it’s a joint sectoral agreement. Not just that, oh, the minister has announced, or the Chairman of NERC has announced. No, it will not happen like that. But we are reviewing the situation. Then, the subsidy implementation.”
He added that the federal government is owing electricity generation companies (GenCos) and electricity distribution companies (DisCos) over N4tr naira in electricity subsidy, which has posed a challenge in strengthening the power sector to deliver optimum service delivery to consumers.
Giving a breakdown, the Minister said N2tr is owed to GenCos as legacy debt while another N1.9tr is owed to them as part of electricity subsidy for 2024 while DisCos are owed N450bn for 2024 electricity subsidy.
The minister said the government would not be able to continue the model of electricity subsidy payment and a new model of intervention is in the offing by identifying a segment of the population that is in need of it.
“How do you expect the GenCos to perform optimally? How do you expect them to pay for gas, service and maintain their turbines and other infrastructure as well as pay their staff? If a total of N4tr is being owed to them.”
