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NERC Approves Tariff Hike for Port Harcourt DisCo

Vandals Attack Power Transmission Towers in North East
Vandals Attack Power Transmission Towers in North East

Amid calls for a reversal of the Band A tariff hike, the Nigerian Electricity Regulatory Commission (NERC) has approved a new tariff increase for the Port Harcourt Electricity Distribution Company (PHED).

The adjustment affects Band A customers classified as Maximum Demand 2 Special (A – MD2 Special), who are customers with a load of 45kVA and above and who maintain their dedicated transformers.

Previously, this category of customers paid N206 per kilowatt-hour (KWh). With the new approval, the rate has increased to N225/KWh.

This decision was detailed in a regulatory document titled “June 2024 Supplementary Order to the Multi-Year Tariff Order – 2024 (June 2024 Supplementary Order) for Port Harcourt Electricity Distribution Plc.” The NERC stated that the tariff approval came under the Tariff Review Application by PHED.

The regulatory body highlighted that the review was necessitated by changes in pass-through indices beyond the control of licensees, including inflation rates, naira/dollar exchange rate, available generation capacity, and gas prices, all contributing to the determination of Cost-Reflective Tariffs.

“The Naira to the US Dollar exchange rate of N1,469.06 per dollar has been adopted for June to December 2024,” the NERC noted. This rate was determined by adding a 1 percent transaction cost to the average foreign exchange rate of N1,454.52 during the period from May 1 to 24, 2024, as obtained from the Central Bank of Nigeria’s website.

Additionally, the Nigerian inflation rate of 33.69 percent for April 2024, as published by the National Bureau of Statistics, was used to revise the inflation rate projection for 2024.

Under Section 116 of the Electricity Act and existing regulations, the commission approved the new tariffs effective June 1, 2024. These tariffs will be subject to monthly adjustments based on pass-through indices, including inflation rates, naira/dollar exchange rates, and gas-to-power prices.

The NERC also stated that tariffs for Bands B to E customer categories would remain frozen at the rates payable since December 2022, pending further policy directions from the government. This policy aims to provide an estimated subsidy benefit of approximately N11.49 billion monthly for customers under the PHED franchise in 2024.

In April, the NERC announced a new tariff for Band A customers, increasing from N68/KWh to N225/KWh, which was later reduced to N206.80/KWh following a rebound in the naira’s value. Despite these adjustments, organised labour and manufacturers have opposed the Band A tariff hike.

This Article is Fact-Checked. See Policy.

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