Manufacturers condemn new electricity tariff

Chairman, NERC, Dr Sam Amadi

The recent increase in electricity tariffs approved by the Nigerian Electricity Regulatory Commission will cripple the operations of industries in the country, the Manufacturers Association of Nigeria has said.

The association also decried the “astronomical increase” in electricity fixed charge from N25,000 to about N250,000 on the average for industrial outfits.

In January, NERC announced after it had conducted a special review of the tariffs that it approved the revised Multi Year Tariff Order 2.1.

“A major highlight of the MYTO 2.1 is a six-month freeze from January 1, 2015 on tariff increase for residential consumers. The increase in tariffs will only affect non-residential consumers, that is, commercial consumers of electricity,” the Chairman, NERC, Dr. Sam Amadi, had said.

MAN, in a document made available to our correspondent in Abuja on Tuesday, however, stated that “the hike in tariff as well as the astronomical increase in fixed charge in the face of estimated billing as against actual consumption is the order of the day. The association considers this as unfair and worrisome!

“The implication of this is that many companies may be forced to close shop, especially the heavy users such as cement and steel industries, which have been expanding their investments through the backward integration approach.”

Speaking during a meeting with NERC, the President, MAN, Dr. Udemba Jacobs, said manufacturers should continue to operate on the old MYTO rate till 2017.

He noted that the fixed charge should be reduced from the average of N250,000 to N25,000, particularly for small and medium-scale industries across board.

According to Jacobs, the fixed charge should be pro-rated based on the amount of energy consumed by companies, adding that NERC should consider and approve a uniform tariff for all manufacturers regardless of wherever they were located, rather than giving some companies a preferential lower tariff advantage over the others because of their geographical locations.

He stated that MAN had developed a Special Purpose Vehicle for generating power for its members in some industrial sectors.

“This company was set up some six years ago, but when we had a promise from government that power was going to improve, we kind of slowed down. We were asked to slow down on it. But now, that the situation is the way it is, we are going to reactivate that again,” he said.

In his reaction, Amadi promised that the commission would look at the requests made by the manufacturers and would work on how to reduce the charges after extensive deliberations with the power distribution companies.

He stated that claims that power generation had reduced significantly were not true, stressing that the country’s electricity generation would grow considerably in due season.

Amadi said, “The truth is that electricity in Nigeria has not decreased significantly. If we are doing between 3,800 and 4,500 megawatts depending on situations, then you are not going to have guarantee of very stable electricity.”

Credit: punchng