Tariff Hike Sparks Outrage As 12 States Unveil Power Project Plans

Tariff Hike Sparks Outrage As 12 States Unveil Power Project Plans....KINDLY READ THE FULL STORY HERE▶

Lagos, Kano, and 10 Other States Set to Launch State Power Projects in Accordance with Electricity Act 2023

Recent reports from The BUSHRADIOGIST reveal that Lagos, Kano, along with 10 additional states, are finalizing plans to initiate power generation within their territories, aligning with the provisions of the Electricity Act 2023.

According to sources, some of these states have already enacted their electricity market regulations and await approval from the Nigerian Electricity Regulatory Commission (NERC) to establish independent regulatory bodies, distinct from the federally owned NERC.

While these states accelerate efforts towards electricity generation, the Federal Government’s decision to implement a 240 percent tariff hike for consumers in Band A, who enjoy 20-hour electricity, faced intensified criticism on Thursday.

Various groups including the Petroleum and Natural Gas Senior Staff Associations of Nigeria, civil society organizations, and the Nigeria Electricity Consumer Advocacy Network have cautioned that the tariff hike could exacerbate the challenges faced by Nigerians.

The subsidy on electricity has been completely removed from the tariff payable by consumers in the Band A category, constituting about 15 percent of the total power users nationwide.

The government, through the NERC, announced the tariff hike on Wednesday, raising the tariff to N225 per kilowatt-hour from the previous rate of N68/kWh, marking a significant 240 percent increase.

However, there are indications that numerous states are leveraging the new Electricity Act to establish their electricity generation entities.

In June 2023, President Bola Tinubu signed the Electricity Act into law, responding to the calls for reform in the power sector and devolution of power from the exclusive list to states, granting them authority over electricity generation, transmission, and distribution within their domains. This move is anticipated to offer enduring solutions to Nigeria’s electricity challenges.

The new law supersedes the 2005 Electricity and Power Sector Reform Act, aiming to encourage private sector investments in the power sector, and advocating for an integrated resource plan and policy accommodating all electricity generation sources.

Under the new act, states or state authorities are empowered to issue licenses for mini-grids and outline operational frameworks for such licensees. This deregulation initiative effectively removes electricity from the exclusive list, enabling states and private individuals to invest in the sector.

While a state can regulate its electricity market by granting licenses to private investors for mini-grids and power plants, the act stipulates that until a state enacts its electricity market regulations, the NERC will retain regulatory oversight over electricity businesses within such states.

Insider sources at the NERC disclosed to The BUSHRADIOGIST that at least 12 out of the 36 Nigerian states are poised to establish their independent electricity regulatory commissions following the enactment of the 2023 Electricity Act.

It is reliably gathered that these states have submitted applications to the NERC, seeking autonomy in regulating their electricity markets without federal intervention.

The NERC official, speaking on condition of anonymity due to restrictions on discussing the matter, indicated that the NERC, presently overseeing the Nigerian electricity market, must transition regulatory responsibilities to state regulators once established.

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