Following the outcry by Nigerians over the planned increase in electricity tariff via withdrawal of electricity subsidy, the upper chamber of the National Assembly on Wednesday cautioned the Federal Government over such action.
The Senate, has, however, mandated its Committee on Power to investigate the statement credited to the Minister of Power with regards to the over N2 trillion subsidy requirements, the N1.3 trillion the ministry was owing GenCos and $1.3 billion owed to gas companies.
The move by the Senate was sequel to the adoption of a motion at plenary on ‘Planned Increase in Electricity Tariff and Arbitrary Billing of Unmetered Customers by Distribution Companies (DisCos).’
The motion, which came under urgent public importance, was sponsored by Sen. Aminu Abbas (PDP: Adamawa) and 10 other senators.
Leading debate on the motion, the lawmaker said it was worrisome to hear of the plan to increase electricity tariff by the relevant statutory authority, noting that the move was wrong especially at this period the nation is going through hardship.
He pointed out that the move is coming at the time the country is facing economic challenges with attendant widespread poverty and high cost of living.
The lawmaker quoted the Minister of Power, who was reported to have said that “the nation must begin to move towards a cost-effective tariff model, as the country was currently indebted with N1.3 trillion to Generating Companies (GenCos) and $1.3 billion owed gas companies.”
According to him, the minister had said that from over N2 trillion needed for subsidy, only N450 billion was budgeted in 2024. Senator Abass said, “The Senate may further note that the same electricity businesses are collecting money from customers for services not rendered.
When they have not added anything to the equipment, they inherited from PHCN.
“Communities buy transformers to replace damaged ones in addition to over burden bills and arbitrary estimates for unmetered customers.
“Cognisance in a country where greater number of the population live below the poverty level, with stagnant wages.
“Rising inflation and depreciating currency, the prospect of higher electricity bill is unattainable.”
Expressing concern over the whole development, the lawmaker noted that the arbitrary energy charges on unmetered customers had become worrisome given February 2024 report of the Nigerian Electricity Regulatory Commission (NERC) on non-compliance with energy billing caps by DisCos and penalty of N10.5 billion imposed on DisCos that over-billed its unmetered customers.
Abass said in 2020, the President of Nigeria then, ordered NERC to commence mass prepaid metering to end estimated billing, saying that funds were released to that effect.
He said it was worrisome that the multiple sanctions declared to be imposed by NERC against DisCos for failing to comply with eradication of estimated billing for unmetered customers which included credit adjustments to over billed unmetered customers for the period January – September, 2023 was not done.
He said March 2024 billing cycle, publication of the list of credit adjustment beneficiaries in two national dailies, indicates a deduction of N10.5 billion from annual allowed revenues of the eleven DisCos during the next tariff review.
This, he said seemed to have been in futility, given the continued violations by DisCOs.
Senator Abbass expressed reservation that in addition to the high cost of living being experienced in the country, the unmetered customers, who are owners of small and medium enterprises are adversely impacted by the level of exorbitant electricity charges and by implication have their businesses affected.
In its resolution, the upper chamber mandated the Committee on Power to investigate the over N2 trillion subsidy requirements as stated by the Minister of Power to avoid the repeat of fuel subsidy scenario.
It also mandated the committee to investigate the statement made by the minister with regard to the N1.3 trillion the ministry was owing GenCos and $1.3 billion owed to gas companies.