Suspend Plans To Remove Electricity Subsidy, Senate Tells FG


Suspend Plans To Remove Electricity Subsidy, Senate Tells FG

The Senate on Wednesday, asked the Federal Government to suspend on going plans to remove electricity subsidy or allow any hike in electricity tariffs given the present hardship in the country.

The resolution of the Senate followed the adoption of a motion titled: “Planned increase in electricity tariff and arbitrary billing of unmetered customers by Distribution Companies (DisCos)”.

The motion was sponsored by a Senator representing the Adamawa Central zone, Aminu Abbas was debated at Plenary on Wednesday

The federal government, had last week declared that it was now “very difficult to sustain subsidy on electricity.”

The Minister of power, Adebayo Adelabu, who disclosed this in Abuja, said Nigeria must begin to move towards a cost-effective tariff model.

He revealed that the country was currently indebted to the tune of N1.3 trillion to electricity-generating companies and $1.3 billion debt to gas companies.

Abbas in his lead debate said: “Senate notes with greatest dismay the plan to increase electricity tariff by the relevant statutory authority in gross disregard of increased economic challenges with attendant widespread poverty and high cost of living;

“The Senate may note that the Hon. Minister of Power was reported saying ‘the nation must begin to move towards a cost-effective tariff model, as the country is currently indebted to the tune of 1.3 trillion naira to generating companies (GenCos) and 1.3 billion dollars owed gas companies.

"According to him, over N2 trillion was needed for subsidy, and only N450 billion was budgeted this year;

“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 it from PHCN.

“Communities buy transformers to replace damaged ones in addition to overburden bills and arbitrary estimates for unmetered customers;

“Cognisance that in a country where a greater number of the population live below the poverty level, with stagnant wages, rising inflation, and depreciating currency, the prospect of the higher electricity bill is unattainable;

“Notes that the issue of arbitrary energy charges on unmetered customers has become worrisome given the February 2024 report of the Nigerian Electricity Regulatory Commission (NERC) on the non-compliance with energy billing caps by DisCos and the penalty of ₦10.5billion imposed on the distribution companies that over-billed its unmetered customers;

“Aware that in 2018, the then Hon. Minister of Power, Works, and Housing directed the Nigerian Electricity Regulatory Commission (NERC) to issue a regulation that facilitates signing of meter agreement between the Federal Ministry of Power, Works and Housing, Ziglaks company and other meter asset providers to address the metering gaps in the power supply industry;

"Further aware that as far back in 2020 the president then, ordered the Nigerian Electricity Regulatory Commission (NERC) to commence Mass pre-paid Metering to end estimated billing, and that Funds were released to that effect;

“Disturbed that the multiple sanctions declared to be imposed by NERC against DISCOs for failing to comply with the scrapping of estimated bills for unmetered customers which include credit adjustments to overbilled unmetered customers for the period January – September 2023 by the March 2024 billing cycle, publication of the list of credit adjustment beneficiaries in two national dailies, and deduction of N10,505,286,072 from the annual allowed revenues of the eleven DisCos during the next tariff review seemed to have been in futility given the continued violations by Discos.

“Recall that this Senate via a motion called on the Federal Government and NERC not to increase tariff on electricity for customers and citizens of this country at this time;

“Regret 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 this level of exorbitant electricity charges and by implication have their businesses affected.

“While the prospect of the new Electricity Act, 2023 of ensuring accurate electricity charges will be negated if DisCos are not investigated to ascertain the current statistical data on unmetered customers, poor provision of electricity service despite exorbitant tariff and regulatory role of NERC which leaves much to be desired.”

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