Electricity Distribution Companies (DisCos) have told the Nigerian Electricity Regulatory Commission (NERC) that tariffs increase will become inevitable should the Nigerian Bulk Electricity Trading Company Plc (NBET) be allowed to increase its price by 30 per cent.
The NBET’s main responsibility is the management of existing power purchase agreements (PPA) and new procurement of power in the electricity chain.
The planned increase in price by NBET was the elephant in the room at a four-day stakeholders meeting among the NERC, top management teams of the 11 DisCos, NBET, Electricity Generation Companies (GenCos) and Transmission Company of Nigeria (TCN), which ended yesterday in Lagos.
Sources at the meeting told The Nation that NBET’s proposition was based on the floating of the naira.
It was learnt that before the unification of foreign exchange markets, NBET sold power to DisCos souring forex at N446 in the then official rate controlled by the Central Bank of Nigeria (CBN). The naira is currently exchanging for between N740 and N770 to one dollar.
The sources added that the DisCos had informed NERC that if NBET implements the 30 percent increase, would not be able to sustain their businesses unless there is increased tariffs.
“The DisCos are insisting that the 30 percent proposed increase by NBET is too much. At this rate, paying NBET for the power sold to us will be very challenging. If we get it (Power) from NBET at 30 percent increase, then how much do we sell to the consumer, and how do we pay NBET?”
Although, the meeting ended yesterday, the NERC did not release any statement on the outcome.
