Sanusi Garba, the chairman of the Nigerian Electricity Regulatory Commission (NERC), has announced that the federal government will continue subsidizing electricity to alleviate the financial burden on Nigerians amidst the country’s economic challenges. This decision was revealed during a news conference held in Abuja on Wednesday.
Garba explained that the government’s decision to subsidize electricity is a response to the current cost of living crisis and other economic factors affecting Nigerians. He clarified that the recently published tariff order by NERC does not entail an increase in electricity tariffs. Instead, it outlines the charges that Electricity Distribution Companies (DisCos) should levy. Additionally, the tariff order specifies the amount of subsidy the government will provide to cover the difference between the approved charges and the actual cost.
According to Garba, the new tariff order aligns with government policy to ensure that DisCos remain operational. It also includes provisions to ensure that DisCos fulfill their obligations, particularly in paying for the electricity they purchase from the Nigeria Bulk Electricity Trading Company (NBET).
Garba highlighted the Electricity Act signed into law in 2023, which presents an opportunity for states to enact laws and take charge of electricity provision in their respective franchise areas. He emphasized NERC’s commitment to collaborating with states to maintain existing public utilities and optimize their service delivery to Nigerians.
Addressing the issue of metering, Garba acknowledged that DisCos face financial challenges in metering their customers. This has resulted in a high rate of estimated billing. To tackle this, NERC has created a framework allowing DisCos to allocate funds from their market revenues for metering purposes. This framework is intended to facilitate the acquisition of meters through potential loans, utilizing a portion of the market revenues as collateral.
Peoples Gazette