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TEM: NERC reviews tariff methodology


By Chris Ochayi

THE Nigerian Electricity Regulatory Commission, NERC, has approved a review of the Multi- Year- Tariff Order, MYTO, 2 regime ahead of take-off date for a disciplined electricity market by January 1, 2015.

With the commencement of MYTO 2, the Commission will now progressively hold electricity distribution, transmission, generation companies as well as other market operators to the terms and conditions of their licences.

The NERC Chairman, Dr. Sam Amadi said, “It is expected that the take-off of MYTO 2 will bring about improved service delivery as distribution companies are now expected to implement their investment plans for metering and strengthen their networks in line with their bid documents.”

He explained that the adjustment in methodology is not expected to bring about any increase in tariff to the residential customers on R1 and R2, who formed majority of electricity consumers, at least not in the next six months.

Explaining the rationale behind the adjustment,  Amadi said that the Commission had shielded ordinary Nigerians from possibility of rates’ shock that could have accompanied the review while pressing the operators for improved service delivery and to abide by the agreement they signed while acquiring the electricity entities.

He explained further that the review was imperative on account of the take off date of January 1, 2015 for the transition electricity market and the memorandum of understanding between the Central Bank of Nigeria (CBN) and the Nigerian Electricity Supply Industry, NESI.

According to him, all these measures were being put in place to ensure the new owners can fund their operations and ensure improved electricity supply to the economy as well as expand the amount of electricity available for economic development.    With this development the existing regime of interim rules, whereby the Commission governs the market without the full rigours of the MYTO, as situation arises will cease, while activities of the market will now be governed by strict contractual obligations.




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