NERC Approves New Electricity Tariff, Expects N1.14 Trillion Reduction in Subsidies

The Nigerian Electricity Regulatory Commission (NERC) has announced that the newly approved electricity tariff is expected to reduce subsidies for the 2024 fiscal year by approximately N1.14 trillion. This move is in line with the Federal Government’s plan to realign the subsidy regime.

According to Vice Chairman Musliu Oseni, the federal government aims to transition towards a more targeted subsidy regime to mitigate the impact of changes in macroeconomic parameters while protecting vulnerable customers and encouraging investments in the Nigerian Electricity Supply Industry (NESI).

NERC conducted a thorough review of tariff applications submitted by the 11 Electricity Distribution Companies (DisCos), following established regulations and business rules. The review process included an analysis of performance improvement plans and a public hearing where stakeholders examined the rate filings.

The commission approved revised rates affecting only customers classified under Band A, which represents about 15% of the customer population. This class of customers is expected to receive a minimum average supply of 20 hours a day.

Customers under Band B to E, representing 85% of the customer population, will not be affected by the tariff review. DisCos have been given mandatory targets for investments and migrating more customers to Band A.

NERC has established a monitoring framework to ensure transparency and accountability in service delivery. An enforcement and compensation mechanism has also been put in place in case of service failure.

Mr. Oseni reassured Nigerians of NERC’s commitment to providing adequate and reliable electricity. The commission is working with state governments to deliver on the gains of the Electricity Act 2023.

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