The Senate called on the federal government to concentrate on the production and distribution of electricity rather than raising electricity rates.
The Senate has demanded that the federal government halt any plans to raise electricity rates in the nation, arguing that the government’s attempt to raise rates and remove subsidies comes at an inappropriate time.
To prevent a repeat of the fuel subsidy scandal, it also decided to investigate the N2 trillion electricity tariff requested by the Minister of Power, Bayo Adelabu.
These resolutions were sequel to the adoption of a motion titled, “Planned Increase in Electricity Tariff and Arbitrary Billing of Unmetered Customers by Distribution Companies (DISCOS), sponsored by Aminu Iya Abbas (PDP, Adamawa Central) and Co-sponsored by 10 others during Wednesday’s plenary.
Recall that last week, during a press briefing, Adelabu stated that Nigeria could not afford to continue subsidising electricity, citing the country’s massive N3 trillion debt in the power sector. However, he also mentioned that, although N450 billion was set aside for subsidies in 2024, the ministry needs over N2 trillion for subsidy.
Presenting the motion, Senator Aminu Iya Abbas (PDP, Adamawa Central) disclosed that the Senate is not in support of the plan to increase electricity tariff by the relevant statutory authority in gross disregard of increased economic challenges with attendant widespread poverty and high cost of living.
He said, “The Honourable Minister of Power was reported saying “the nation must begin to move towards a cost-effective tariff model, as the country is currently indebted to the tune of 1.3 trillion naira to generating companies (GenCos) and 1.3 billion dollars owed gas companies. According to him, over N2 trillion needed for subsidy, only N450 billion was budgeted this year.
“The same electricity businesses are collecting money from customers for services not rendered. When they have not added anything to the equipment, they inherited it from PHCN. Communities buy transformers to replace damaged ones in addition to overburden bills and arbitrary estimates for unmetered customers.
“In a country where a greater number of the population live below the poverty level, with stagnant wages, rising inflation, and depreciating currency, the prospect of the higher electricity bill is unattainable.”
According to him, the Senate “The issue of arbitrary energy charges on unmetered customers has become worrisome given the February 2024 report of the Nigerian Electricity Regulatory Commission (NERC) on the non-compliance with energy billing caps by DISCOS and the penalty of ₦10.5 Billion imposed on the distribution companies that over-billed its unmetered customers.
“In 2018, the then Hon. Minister of Power, Works, and Housing directed the Nigerian Electricity Regulatory Commission (NERC) to issue a regulation that facilitates signing of meter agreement between the Federal Ministry of Power, Works and Housing, Ziglaks company and other meter asset providers to address the metering gaps in the power supply industry.
“As far back in 2020 the president then ordered the Nigerian Electricity Regulatory Commission (NERC) to commence Mass pre-paid Metering to end estimated billing, and that Funds were released to that effect.
“Disturbed that the multiple sanctions declared to be imposed by NERC against DISCOs for failing to comply with the scrapping of estimated bills for unmetered customers which include credit adjustments to overbilled unmetered customers for the period January – September 2023 by the March 2024 billing cycle, publication of the list of credit adjustment beneficiaries in two national dailies, and deduction of N10,505,286,072 from the annual allowed revenues of the eleven DISCOs during the next tariff review seemed to have been in futility given the continued violations by DISCOs.
“Recall that this Senate via a motion called on the Federal Government and NERC not to increase tariff on electricity for customers and citizens of this country at this time.
“In addition to the high cost of living being experienced in the country, the unmetered customers who are owners of small and medium enterprises are adversely impacted by this level of exorbitant electricity charges and by implication have their businesses affected. While the prospect of the new Electricity Act, 2023 of ensuring accurate electricity charges will be negated if DISCOs are not investigated to ascertain the current statistical data on unmetered customers, and poor provision of electricity service despite exorbitant tariff and regulatory role of NERC which leaves much to be desired.”
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In his contribution, Senator Aminu Tambuwal (PDP, Sokoto South) warned the Federal Government, urging it to abandon the plan, particularly since the removal of fuel subsidies has left many citizens in financial hardship.
Senator Orji Kalu (APC, Abia North), on his part, pointed out that even developed nations subsidise electricity. He stated that distribution ought to be the government’s primary concern. “Why should people be paying for what they did not use? Our focus should be on transmission and distribution,” he said.
Also contributing to the motion, the Senate Minority Leader, Senator Abba Moro (PDP, Benue South) said that Nigeria must achieve sufficient power generation and distribution before thinking about raising tariffs.
In his remark, the President of the Senate, Godswill Akpabio, concurred with his colleagues when he said that any increase would put Nigerians through even more hardship, particularly at a time when they are already struggling with hunger and high living expenses.
Following these debates, the Senate mandated its Committee on Power led by Senator Enyinnaya Abaribe (APGA, Abia South) to investigate the over N2 trillion subsidy requirements as stated by the Minister of Power to avoid the repeat of the fuel subsidy scenario and the statement made by the Hon. Minister with regards to the 1.3 trillion naira the ministry was owing generating companies and 1.3 billion dollars owed to gas companies.
The Committee was also mandated to investigate the operations of DISCOs to ascertain the current status of metering and their extent of compliance with relevant legal and regulatory frameworks in service delivery as well as to direct the NERC to furnish the Committee with any relevant documents on metering of electricity consumers, post privatisation requirements for the operation of DISCOs and evidence of regulatory actions taken to ensure statutory compliance by DISCOs.
It further mandated the Committee to Investigate the role of the Ministry of Power, NERC, and Ziglaks company on their roles in the failed agreement to provide prepaid meters and ensure Nigeria is not shortchanged as well as engage the Nigerian Electricity Regulatory Commission (NERC) to come up with a lasting solution to the Energy Billing System in the country and other related issues therein.
The Senate also asked its Committee on Power to find out the truth of the matter with regards to the issue of Federal Government directive and release of funds for mass pre-paid metering and report findings to the Senate and to enforce and ensure the judicious utilisation of the 10.5 billion naira penalty imposed on DISCOs.
It requested the Committee to direct NERC to ensure the implementation of Energy caps by all DISCOS to unmetered customers in the country. The Committee was directed to submit a comprehensive report for further legislative action within three weeks.
