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Who authorised hike, as AEDC backtracks on new electricity tariffs meant to take effect July 1?

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After sending shockwaves through the country with notices of planned hike in electricity tariffs from 1st July, distribution companies appear to be backtracking with a notice from the Abuja Electricity Distribution Company (AEDC) to customers within its area of operation to ignore its earlier notice.

The new notice reads: “Please disregard the circulating communication, regarding review of electricity tariffs.

“Be informed that no approval for such increments has been received. We regret any inconvenience.”

But the action of the electricity distribution companies has raised a nagging question for which regulatory agencies have remained silent on: who authorised the DisCos to traumatise consumers and overheat the system with notices of planned increase in tariff?

An earlier notice by AEDC read: “Dear Valued Customers, effective July 1st 2023, please be informed that there will be an upward review to the electricity tariff influenced by the fluctuating exchange rate.

“Under the MYTO 2022 guidelines, the previously set exchange rate of N441/$1 may now be revised to approximately N750/$1 which will have an impact on the tariffs associated with your electricity consumption.

“For customers within band B and C, with supply hours ranging from 12 to 16 per day, the new base tariff is expected to be N100 per kWh while Bands A with (20 hours and above) and B (16 to 20 hours) will experience comparatively higher tariffs.

“For customers with a prepaid meter, we encourage you to consider purchasing bulk energy units before the end of this month as this will allow you take advantage of the current rates and potentially make savings before the new tariffs come into effect.

“For those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August.”

The Ikeja Electricity and Eko Electricity Distribution Companies sent similar notices, even after the Nigera Labour Congress (NLC) warned against the increases.

Analysts are accusing the distribution companies of creating panic in a ploy to get consumers to rush to recharge their meters.

It is expected that other companies, like the AEDC, will issue counter notices, amid reports that government may have stopped the planned increases to forestall an angry backlash from Nigerians still bearing the burden of the removal of fuel subsidy.

Within hours of taking over as President, Bola Tinubu, had caused a spike in fuel prices with an announcement that fuel subsidy would be withdrawn.

Though the 2023 Appropriation law stated that the withdrawal would be effective from 1st July, 2023, it was effected from 1st June and has remained.

Even a threat by the NLC to proceed on strike did not materialise as a National Industrial Court (NIC), Justice Olufunke Anuwe, granted an ex-parte order stopping the labour union from carrying out the strike.

Also, the NLC and the Trade Union Congress (TUC) entered into negotiations with the federal government.

The Multi Year Tariff Order (MYTO) is the methodology for regulating electricity prices.

It provided a 15-year tariff path for the Nigerian electricity industry with limited ‘minor’ reviews each year in the light of changes in a number of parameters.

These included inflation and gas prices and ‘major’ reviews every five years when all of the inputs were reviewed with stakeholders.AEDC backtracks on new electricity tariffs meant to take effect July 1

After sending shockwaves through the country with notices of planned hike in electricity tariffs from 1st July, distribution companies appear to be backtracking with a notice from the Abuja Electricity Distribution Company (AEDC) to customers within its area of operation to ignore its earlier notice.

The new notice reads: “Please disregard the circulating communication, regarding review of electricity tariffs.

“Be informed that no approval for such increments has been received. We regret any inconvenience.”

The earlier notice by AEDC read: “Dear Valued Customers, effective July 1st 2023, please be informed that there will be an upward review to the electricity tariff influenced by the fluctuating exchange rate.

“Under the MYTO 2022 guidelines, the previously set exchange rate of N441/$1 may now be revised to approximately N750/$1 which will have an impact on the tariffs associated with your electricity consumption.

“For customers within band B and C, with supply hours ranging from 12 to 16 per day, the new base tariff is expected to be N100 per kWh while Bands A with (20 hours and above) and B (16 to 20 hours) will experience comparatively higher tariffs.

“For customers with a prepaid meter, we encourage you to consider purchasing bulk energy units before the end of this month as this will allow you take advantage of the current rates and potentially make savings before the new tariffs come into effect.

“For those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August.”

The Ikeja Electricity and Eko Electricity Distribution Companies sent similar notices, all hiding under the MYTO policy, even after the Nigera Labour Congress (NLC) warned against the increases.

The Multi Year Tariff Order (MYTO) is the methodology for regulating electricity prices.

It provided a 15-year tariff path for the Nigerian electricity industry with limited ‘minor’ reviews each year in the light of changes in a number of parameters.

These included inflation and gas prices and ‘major’ reviews every five years when all of the inputs were reviewed with stakeholders.

Analysts are accusing the distribution companies of creating panic in a ploy to get consumers to rush to recharge their meters.

It is expected that other companies, like the AEDC, will issue counter notices, amid reports that government may have stopped the planned increases to forestall an angry backlash from Nigerians still bearing the burden of the removal of fuel subsidy.

Within hours of taking over as President, Bola Tinubu, had caused a spike in fuel prices with an announcement that fuel subsidy would be withdrawn.

Though the 2023 Appropriation law stated that the withdrawal would be effective from 1st July, 2023, it was effected from 1st June and has remained.

Even a threat by the NLC to proceed on strike did not materialise as a National Industrial Court (NIC), Justice Olufunke Anuwe, granted an ex-parte order stopping the labour union from carrying out the strike.

Also, the NLC and the Trade Union Congress (TUC) entered into negotiations with the federal government.

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