Aba Power Electric seeks upward review of tariff

Aba Power Limited Electric (APLE) on Tuesday began moves for an upward review of electricity tariff with the Nigerian Electricity Regulatory Commission (NERC).

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According to the company, the current tariff is no longer sustainable and is affecting its ability to provide efficient and reliable electricity supply to its customers.

The company proposed a tariff increase from N223.12/kWh in 2024 to N263.08/kWh in 2025 for band A-Non MD, 240.09/kWh in 2024 to N283.09/kWh in 2025 for band A-MD1, N245.20/kWh in 2024 to N289.11/kWh in 2025 for A-MD2.

Also, the company proposed N213.74/kWh in 2024 to N252.03/kWh in 2025 for band B-Non MD, N233.13/kWh in 2024 to N274.89/kWh in 2025 for B-MD1, N237.71/kWh in 2024 to N280.29/kWh in 2025 for B-MD2, among others.

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The company explained that the cost of generating and distributing electricity has increased significantly due to the recent changes in macroeconomic parameters in the country.

It noted that a review of the tariff would enable it to recover its costs and invest in improving the electricity infrastructure, which would ultimately benefit consumers.

The Managing director of Aba Power, Ugo Opiegbe, while speaking at the NERC public hearing for its application for extraordinary tariff review in Abuja on Tuesday, said the unforeseen changes in macroeconomic parameters, such as increasing generation cost and investment without commensurate return, is the reason for the rate review.

“The need to incorporate changes in macroeconomic parameters and indices which affect the quality of service, operations and sustainability of our company business.

“Niger Delta Power Holding Company (NDPHC) increased invoices for its wholesale energy cost to APLE from the NERC approved Power Purchase Agreement (PPA) contract price of N21kwh to N136.26/kWh.

“Cost of generation from the Geometric Power Aba Limited (GPAL) plant is N133.2/kWh. The cost has continuously increased, making it practically impossible for us to sustain impact. It’s so difficult for us because the wholesale price is even higher than our highest retail price. “That’s where we have found ourselves. That’s the major reason why we are here,” Mr Opiegbe said.

In his remarks, the NERC Vice Chairman, Musiliu Oseni, reiterated the commission’s commitment to balancing the interests of consumers and service providers.

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“The commission would look critically at the parameters set by the company to arrive at the cost it proposed to ensure that customers benefit from it. So when your customers are happy, they will be willing to pay more to you, so that you can also improve on your operational performance. I think that aspect, we need to look at it critically.

“It’s quite good that you already concluded the process. Before we allow your cost to be passed on to the end user, we will have to look at it and see whether problems it might cause or otherwise. This hearing is part of our effort to ensure that any tariff review is fair and reflects the realities on the ground. We will carefully review the submissions made here today before making a final decision,” he said.

In April, NERC announced a hike in electricity tariffs for Band A customers, noting that they are offered an average daily electricity supply of 20 hours, although many complain they do not get up to that.

The policy allowed distribution companies (DisCos) to raise electricity prices to N225 ($0.15) per kilowatt-hour from N68, in return for guaranteeing 20 hours of electricity supply per day.

At the time, Mr Oseni said the Band A consumers represent 15 per cent of the population but consume 40 per cent of the nation’s electricity.

He noted that the increase would not affect Bands B, C, D, and E while noting that the number of customers previously on Band A has reduced.