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The House of Representatives has taken a decisive step by instructing the Nigerian Electricity Regulatory Commission (NERC) to halt the implementation of the recent electricity tariff hike.
Additionally, the House has demanded the suspension of other conditions outlined in the new multi-year tariff order.
To address these concerns comprehensively, the House has established a special committee comprising members from the Committees on Power, Commerce, Delegated Legislation, and National Planning.
This committee will conduct a thorough hearing on the regulation of electricity prices in Nigeria. Key stakeholders, including the Minister of Power, Chairman and Commissioners of NERC, CEOs of all electricity utilities, and leaders of labor unions and chambers of commerce, will participate in this hearing.
Furthermore, the House has decided to appoint a respected former regulator as a technical consultant. This consultant will develop frameworks to assess the legality and reasonableness of NERC’s procedures in approving the tariff increase and setting performance standards for electricity distribution companies.
Additionally, the consultant will collaborate with the special committee to draft a bill that ensures proper consultation and legislative review processes for tariff setting in the electricity and other public services sectors in Nigeria.
These actions were taken following the urgent motion presented by the Honorable Nkemkanma Kama, addressing the sudden surge in electricity prices in Nigeria.
Kama said, “It highlights concerns over due process, fairness, and the impact on consumers. The motion aims to restore public trust, protect consumer rights, and ensure regulatory accountability in the Nigerian Electricity Supply Industry (NESI).
“The facts presented include the alarming tariff increase announced by the Nigerian Electricity Regulatory Commission (NERC) on April 1, 2023, resulting in a staggering 300% rise for certain consumers.“However, what’s more concerning are the reports indicating discrepancies in customer categorization and widespread complaints regarding inadequate service despite increased charges.
“This situation has not just sparked national anxiety, but it also threatens regulatory certainty and investor confidence in the sector, demanding immediate attention.”
He emphasized that the motion calls for legislative action, highlighting both the constitutional and moral duties to tackle the crisis and ease the challenges faced by Nigerian citizens.
“It places a strong emphasis on the legislative oversight role over NERC and the electricity utilities, stressing the need for fair and just pricing and consultation with stakeholders in tariff determination processes. This is not just a responsibility, but a duty we owe to our constituents.
“Key issues highlighted include the failure of due process in approving the tariff increase, concerns over discriminatory practices, and the disputed nature of government subsidies to electricity distribution companies (DISCOs).
“The motion proposes resolutions to suspend the recent tariff increases, establish a special committee for hearings involving relevant stakeholders, appoint a technical consultant to assess the legality and reasonableness of NERC’s procedures, and draft a bill to improve regulatory processes in tariff setting.
“Overall, this motion underscores the importance of legislative action to address the challenges facing the electricity sector and ensure fair treatment of consumers while promoting transparency and accountability in regulatory decision-making.”
In a recent session at the Senate Committee on Power, the Minister of Power, Adebayo Adelabu, justified the tariff increase, citing the government’s inability to sustain power subsidies.
Adelabu emphasized the necessity for substantial investments, estimating a requirement of $10 billion per year over the next decade to rejuvenate the sector. “This is because of the infrastructure requirement for the stability of the sector, but the government cannot afford that,” the minister had said.
Adelabu has declared that the electricity sector is becoming more appealing to investors thanks to the rise in electricity tariffs for Band A customers.
