As controversy deepens over the alleged electricity tariff hike by the Federal Government, the Nigerian Electricity Regulatory Commission (NERC) has unveiled new regulations outlining the procedures for tariff reviews.
In its latest directive, signed by Chairman Sanusi Garba, NERC reaffirmed its mandate under the Electricity Act 2023 to set fair electricity tariffs that allow industry operators to recover costs while ensuring reasonable returns on investments. The regulation emphasizes that power generation, transmission, distribution, trading, and system operation remain subject to tariff oversight.
Citing Section 116 of the Act, the commission explained that the Multi-Year Tariff Order (MYTO) methodology will guide tariff reviews, ensuring industry sustainability. Under this framework, a major tariff review occurs every five years, with all tariff assumptions reassessed for efficiency.
Ahead of any major tariff hike, NERC must notify operators at least one year in advance and invite them to submit tariff review applications within 120 days, supported by financial statements, investment plans, and records of customer consultations. Public feedback will also be considered before final approval.
Additionally, NERC disclosed that minor tariff reviews may be conducted monthly or within six months to reflect fluctuations in fuel costs, inflation, exchange rates, and power generation capacity.
Meanwhile, Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, confirmed that an electricity tariff review is imminent. She noted that the current N200 billion monthly electricity subsidy disproportionately benefits the wealthiest 25% of Nigerians, leaving many low-income households underserved. The government, she said, is working on a new subsidy structure to ensure affordable power for the masses.