- Electricity distribution companies (DisCos) have announced a N2.70 increase in electricity tariff for Band A customers
- Band A customers have had to pay more for electricity since April, when the rate was increased by 300 per cent to N225/kWh from N68/kWh
- The new rate may further push more customers in the category to opt for other energy sources, including solar
Band A customers of electricity distribution companies (DisCos) will have to pay an extra N2.70 per kilowatt-hour (kWh) following an announcement of an increase in electricity tariff.
The DisCos, which include Ibadan Electricity Distribution Company (IBEDC) Plc, Kaduna DisCo, and Port Harcourt Electricity Distribution Company (PHED), said the tariff has been adjusted from N206.80/kWh to N209.50/kWh effective July 1.
The tariff hike comes just two months after DisCos reduced the rates from N225/kWh to N206.80kWh.
A statement by the acting Managing Director of IBEDC, Engr Francis Agoha, on Wednesday, July 3, noted that the review had been duly approved by the Nigerian Electricity Regulatory Commission (NERC) as captured in the multi-year tariff supplementary order.
It said the adjustment is necessitated by several key economic indices, including fluctuations in the exchange rate, the current inflation rate, available generation capacity and the cost of gas.
“These factors have significantly impacted operational costs and the new tariff will mitigate these financial pressures while continuing to deliver high-quality electricity services.
“It is important to note that this adjustment affects only our Band A customers. The tariffs for Bands B, C, D, and E remain unchanged.
“We remain committed to providing reliable and efficient electricity services to all our customers across different bands.
“We understand that any change in tariffs can be a concern for our customers and we assure you that this adjustment is necessary to maintain and improve the quality of our services. Our goal is to ensure that you receive the best possible value for your money,” Agoha said.
Kaduna DisCo announced the tariff hike in a statement by its Head of Corporate Communications, Abdulazeez Abdullahi.
PHED, on its part, shared the notice on its social media handles on Wednesday and guaranteed the premium customers of the availability of a minimum of 20 hours of electricity supply per day.
Band A customers in the eye of the storm
In April this year, the NERC had announced a 300 per cent hike in the electricity tariff for Band A customers.
Following the announcement, electricity distribution companies (DisCos) were allowed to increase electricity tariff to N225/kWh from N68/kWh previously.
Musiliu Oseni, Vice Chairman of NERC, said the decision was to ensure sustainable energy distribution and reduce subsidies by N1.14 trillion for the 2024 fiscal year in line with the Federal Government’s subsidy realignment.
He said the rate increase will affect only 15 per cent of the population of electricity customers in Nigeria who consume 40 per cent of electricity in the country. DisCos are expected to provide a minimum of 20 hour/day of electricity, measured over a week.
The review does not affect electricity customers under Band B,C,D and E service category, who make up 85 per cent of electricity consumers.
Oseni also stated that DisCos have been given mandatory targets for investments and migration of more customers to Band A category.
He said, “With the newly approved tariffs, subsidies for the 2024 fiscal year are expected to reduce by about N1.14 trillion in furtherance of the Federal Government’s realignment of the subsidy regime.
“The commission has established a robust monitoring framework leveraging technology to ensure that the public has visibility of the service covenant with their service providers.”
Short-lived respite for Band A users
Following protests from Band A electricity customers, especially manufacturers and many labour unions over the spillover effect of the rate hike, DisCos reduced the tariff to N206.80/kWh, effective May 6, 2024.
While announcing the price slash, Ikeja Electricity Distribution Company (IKEDC) said, “Please be informed of the downward tariff review of our Band A feeders from N225/kwh to N206.80/kwh effective 6th May 2024 with guaranteed availability of 20-24hrs supply daily.”
In its own circular, Kaduna Electricity Distribution Company said the review affects both prepaid and postpaid customers.
On its part, the Kaduna DisCo said the review affects both prepaid and postpaid customers.
Kano DisCo, in the announcement by its Head of Corporate Communications, Sani Sani, said the newly approved tariff would be subject to “monthly adjustments of pass-through indices including inflation rates, NGN/USD exchange rates and gas- to-power prices.”
Exploring other options
Due to the electricity price hike, customers in the Band A service category have started exploring other alternatives of electricity generation.
One of such options is solar, which they argue is more sustainable and cost effective than either regulating power usage or choosing electricity from generating sets.
At the rate of N206.80/kWh, Band A customers get 4.8 units for N1,000 compared to 14 units they get when the rate was N68/kWh.
Though the cost of solar power installation has been on the increase due to increased demand and may run into millions depending on one’s choice, those who opted for it say it is more economical than the exorbitant charges by DisCos.
A social media commentator, Morris Monye, while announcing that he has switched to solar on X, said, “I don leave una. Solar is the best way to go. No more Band A. I think everyone should go this route.”
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Netizens said the government should instead fight the cabal that sabotages the system and improve the electricity supply.
