Nigerian Electricity Distribution Companies Apply for Rate Review

Request for Rate Review Based on Macroeconomic Factors

The Federal Government has disclosed that electricity distribution companies (Discos) in Nigeria have submitted a request for a rate review. The notice, published by the Nigeria Electricity Regulatory Commission (NERC), cites the need to incorporate changes in macroeconomic parameters and other factors affecting the quality of service, operations, and sustainability of the companies as the basis for the request.

Compliance with Electricity Act and Regulatory Rules

NERC stated that the Discos’ request for a rate review is in accordance with Section 116 (1) and 2(a&b) of the Electricity Act 2023 and other relevant regulations. This indicates that the companies are following the established legal framework and regulatory guidelines in seeking the review.

Previous Tariff Hike Plans and Public Reaction

Earlier attempts by some electricity distribution companies to increase tariffs from July 1 faced significant public resistance. The Nigerian Labour Congress (NLC) voiced opposition to the proposed tariff hike, citing the ongoing hardship caused by the removal of petrol subsidy. In response to the public outcry, the Discos postponed the planned tariff increase. However, with the recent notice from NERC, indicating the Discos’ application for a rate review, the possibility of future tariff adjustments remains. NERC will conduct a Rate Case Hearing on the applications before making a ruling, following the rule-making process outlined in the Electricity Act.