We are under pressure to reduce tariff after Enugu rate cuts – DisCos
Electricity Distribution Companies (DisCos) have reported mounting pressure to reduce electricity tariffs in other states after the Enugu State Electricity Regulatory Commission (EERC) implemented a tariff cut for Band A customers.
Barr. Sunday Oduntan, the MD/CEO of the Association of Nigerian Electricity Distributors (ANED), expressed concerns about the impact of this decision on the broader market.
In a statement released on Thursday, Oduntan highlighted the lack of coordination with the Nigerian Electricity Regulatory Commission (NERC) and other stakeholders, raising alarms about the potential instability and liquidity issues within the Nigerian Electricity Supply Industry (NESI).
“Since the Tariff Order by EERC for Enugu State residents was announced, DisCos in other states have faced intense scrutiny to follow suit. Some customers have even stated they will halt bill payments until tariffs are adjusted,” Oduntan noted.
While DisCos are hopeful that electricity tariffs may decrease in the future, he emphasized that it is not their intention to burden loyal customers. “We have been working closely with the Federal Government to enhance stable power supply,” he said.
Oduntan reinforced the need for cost-reflective tariffs, explaining, “This is a result of the economic realities of our nation. The EERC’s reliance on federal government subsidies to lower Band A tariffs is concerning. We believe subsidies should be structured transparently and funded promptly to avoid cash flow disruptions.”
He further indicated that delays in subsidy payments have exerted severe operational pressures on generation companies and gas suppliers, with nearly ₦5 trillion outstanding to these market participants.
In light of this situation, Oduntan remarked, “The Federal Government, through the Honorable Minister of Power, Chief Bayo Adelabu, has made it clear that states implementing power tariff cuts must be prepared to provide subsidies and be accountable for the financial implications.
”He concluded by stating that the Nigerian power market remains fundamentally coordinated, particularly regarding bulk energy purchases and settlements involving generation companies and the Nigerian Bulk Electricity Trading Company (NBET).
Source: Daily Trust
