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New electricity tariff regime starts in July, FG tells Senate

Published

5 years ago

June 16, 2020

THE Federal Government told the Senate on Tuesday that the new increment on electricity tariff would take off next month, July.

The government has also said that the central root issue responsible for the epileptic situation in the Power Sector has to do with the clear lack of Central Coordination within the Sector…

Speaking yesterday in Abuja when he appeared before the Senate Investigative Hearing on Power Sector Recovery Plan and the impact of Coronavirus, COVID- 19, Minister of Power, Sale Mamman, Engr. Sale Mamman also attributed the problem in the Sector that massive infrastructural deficit existing within the electricity value chain was responsible for why the Sector has failed to achieve its set goals or objectives.

Engr. Mamman appeared before the Senator Gabriel Suswam, Peoples Democratic Party, PDP, Benue North East led Committee on Power that is carrying out an investigation, to identify the reasons for efficiency and underperformance in terms of unstable and inadequacy electricity supply in the power sector despite the huge financial interventions by the Federal Government as well as assist President Muhammadu Buhari to achieve his promise to Nigerians of providing them with adequate and stable power supply.

According to the Minister, the power sector is also grappling with the challenge of infrastructural misalignment, market inefficiency/transparency, sector governance/policy coordination, increase energy access and completion of legacy projects, adding: “Note that the teething issues, as well as the legacy issues affecting the power sector, is primarily an issue of infrastructural deficit and lack of coordination in the sector.”

The Minister of Power who told the Committee that the outbreak of the Coronavirus, COVID-19 pandemic has affected the Purchasing Power of Consumers, Payment Capability of Electricity Consumers as well as the demand for electricity in general, said that a lot of Capital Investment in the Sector was dependent on Donor Funding, Loans, and budgetary allocation, just as he has however assured that the Challenges in the Power Sector would soon fade into relative insignificance.

Engr. Mamman said, “The COVID-19 pandemic, has had a great economic impact – not just on the health sector, but the overall economy of the country. Indeed, the prevalence of the pandemic has already reduced productivity due to the strategy adopted globally to contain it. This by default affects the purchasing power of consumers and the demand for electricity in general.

“The current situation in the Nigerian Power Sector is that in which a lot of capital investment is being made, most of which is dependent on donor funding, loans, and budgetary allocation.

“For projects that we have already secured their funding, we do not expect any adverse effect. However, for those that require our counterpart funding in the face of dwindling national revenue, we are proactively seeking strategies that will enable us to anticipate the impact and plan for it to enable us to deliver within the projected timelines. This explains our prayer for the Distinguished Senators to consider and approve additional funding for the execution of the various projects we are undertaking.

“The impact of the COVID-19 pandemic has also affected our laid out plan for the repositioning of the electricity market towards financial sustainability under the Power Sector Recovery Programme (PSRP). Initially, the Regulator, following the completion of public consultation on tariff review, planned on conducting a tariff review in April 2020. However, due to COVID-19 and customer apathy, the proposed tariff review was delayed by 3 months. The impact of this means the subsidy being incurred in maintaining the current tariff level had to be maintained until July 2020 when the proposed tariff review will be implemented.

“The challenge we are currently facing in the development and expansion of our transmission line is budget and release of FG’s commitment in the estimated sum of N32 billion primarily for Right of Way acquisition and environmental impact mitigation. The fund should be provided for in 2020, 2021, and 2022 Appropriation of the Ministry of Power.

“We believe solving two challenges alone, would not only redress these challenges but will also unlock the Sector for investment, efficiency, and service delivery, bringing affordable and stable power to the nation.

“It is thus fortuitous that President Muhammadu Buhari has championed the Siemens Electrification Plan under the Presidential Power Initiative, as the central theme of the Government’s strategy in the Sector.

“I believe that all efforts rendered by the many relevant stakeholders within the stakeholders should be aligned with the PPI for maximum

effectiveness in implementation.

“It is our only choice to once and for all resolve the longstanding issue of the Power Sector.”