NERC Approves New Electricity Tariff, Abolishes Fixed Charges

The new electricity tariff regime approved by the Nigerian Electricity Regulatory Commission (NERC) has removed fixed charges for all classes of electricity consumers.

This is contained in a statement on the company’s website, signed by its Head, Public Affairs Department, Dr Usman Abba Arabi.

It said from the next billing period, distribution companies would no longer charge their customers monthly fixed charges.

Fixed charge is that component of the tariff that commits electricity consumers to paying an approved amount of money not minding whether electricity is consumed during the billing period.

Under the new tariff regime, electricity consumers will now only pay for what they consume from month to month.

According to the Chairman of NERC, Dr Sam Amadi: “This is good news for electricity consumers who have long asked for a more just and fair pricing of electricity.

“The regulatory commission had promised to address all the complaints against fixed charges through a regulatory process that promotes investments in the electricity industry without unfairly burdening electricity consumers.

“This is in line with NERC’s mandate to be fair in all its regulatory interventions.”

Although, the new tariff regime comes with an increase in energy charges, all electricity consumers (residential and commercial) will no longer pay fixed charges.

“Their total bills will depend on the electricity they actually consume and may be reduced when they conserve electricity.”

The statement said that consumers would no longer spend money every month to pay for fixed charges even when they did not receive electricity in their homes and business.

“The objective of the new tariff is to enable prudent consumers to save money on electricity bill as they can now control their consumption and not pay monthly fixed charges.”

For instance, residential customer classification (R2) in Abuja Electricity Distribution Company will no longer pay N702 fixed charge every month.

Their energy charge will increase by N9.60kwh.

Also, residential customers (R2 customers) in Eko and Ikeja electricity distribution areas will no longer pay N750 fixed charges.

They will be getting N10/kwh and N8kwh increase respectively in their energy charges.

Similarly, the burden of N800 and N750 fixed charges would be lifted off the shoulders of Kaduna and Benin electricity consumers.

These consumers will see an increase of N11.05/kwh and N9.26/kwh respectively in their energy charges.

The new tariff is also good news for commercial consumers.

For example, commercial customers’ classification C2 in Ibadan and Enugu will no longer pays fixed charges of N17, 010. and N22, 141.

Their energy charge will increase by N12.08kwh and N13.35kwh respectively.