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Nigerians should expect an increase in electricity tariff as
their new year present in 2011, the sole administrator of Nigeria Electricity
Regulatory Commission (NERC), Imamuddeen Talba, has said.

Mr Talba, who spoke at a workshop on the annual review of the
Multi Year Tariff Order (MYTO) organised by the commission, said the planned
increase would not be effected this year.

“The 2008 tariff order has frozen retail tariffs at N6.00 for
2008, N7.00 for 2009 and N8.50 for 2010 average per kilowatt hour (KWh). Let me
also assure you that the minor review we are about to conduct today will only
affect wholesale price and not the retail tariff,” he said.

Mr. Talba explained that electricity consumers, who pay the
retail tariff, would not be affected by the minor review, as the MYTO as well
as government subsidy had already taken care of it.

While explaining the reason for the minor review, Haliru Dikko,
the head of market competition and rates of the commission explained that the
commission took into consideration, “the rate of inflation, naira exchange rate,
and the gas price.”

Tariff will increase in
2011

Though the MYTO provides that the major tariff review will be
carried out once in every five years, which should have been in 2012, Mr. Talba
explained that to move this sector forward, the commission has decided to bring
backward the date for the major review of the MYTO to ensure that tariffs are
in line with present economic realities.

The time table for the major review was, after contribution by
attendees, approved by the commission. This includes provision for “draft
retail tariff determination.” Mr. Dikko, who explained the process for the
major review, stated that “the tariff (new tariff including retail) will become
operational from January 2011.” On the excuse by some electricity producers, particularly
subsidiaries of the PHCN, that unavailability of gas was their reason for not
meeting their generation target, Mr. Talba stated that the excuse was no longer
tenable.

“There is more than enough gas, so nobody should complain that
there is no gas,” he said, while confirming that the NNPC had agreed to supply
sufficient gas to any generating company that had an agreement with it.

While explaining that low use electricity consumers,
particularly those in the R1 and R2 category, would still enjoy government
subsidy beyond 2011, Mr. Talba stated that the Federal Government had only
released 43.9bn of the N177billion meant for electricity subsidy between 2008
and 2011.

The spending of the released sum has, however, become
contentious – making the NERC to call for an audit.

“Based on a number of concerns by the commission and
stakeholders on the administration of the subsidy so far released, we have
appointed a firm of auditors to review the subsidy disbursement,” Mr. Talba
said.

NEXT on Sunday, in its previous reports, had detailed how the management of
the first N32billion subsidy led to the dismissal of the former commissioners
of NERC.