Enugu State Electricity Regulatory Commission ,EERC, has clarified its recent order reducing electricity tariffs for Band A customers from N209/kWh to N160/kWh.
According to the commission in a statement on Wednesday July 23, signed by its Commissioner for Electricity Market Operations, Reuben Okoye, the decision was based on a thorough review of MainPower Electricity Distribution Limited’s costs.
“We did not tamper with the prevailing cost of power generation in the country in any way,” said Okoye.
The commission emphasised that the new tariff order ensures MainPower recovers all its efficient costs and makes a reasonable return on its business.
The statement noted that the reduction applies only to Enugu State and does not affect electricity services in other states.
EERC also invited generation companies to set up power plants in Enugu State, with a willingness to consider and approve Power Purchase Agreements (PPAs) and tariffs.
The agency maintained that although it inherited the current tariff regime, “the Commission is focused on developing a sub-national electricity market that is transparent, accountable, reliable and sustainable and therefore will review utility costs of service to achieve its mandate to the people of Enugu State.”
The statement partly read: “The order is for MainPower’s operation in Enugu State. It does not affect electricity services in other states, between states and across the country.
“The cost of delivering electricity from the National Grid to MainPower via EEDC has been accommodated in full. We did not tamper with that cost at all in our tariff determination, but rather adopted it.
“Our order ensures that MainPower recovers all its efficient costs and makes reasonable return in its business of providing electricity services to citizens of Enugu State.
“Considerations and reconsiderations of the MainPower tariff application and data still presents the same outcome that ensures full payment of invoices to all parties.”
On the justification for tariff reduction, EERC said, “Having gone through our rigorous process, EERC has no rationale or justification to keep Band A at N209 in the state.
“EERC has not removed a kobo from the generation and transmission costs of delivering power to Enugu State, but rather included the exact costs to ensure complete payment of MainPower’s portion of the Nigerian Bulk Electricity Trading (NBET), invoices. Also, MainPower’s share of EEDC’s debts arising from CBN’s interventions in the NESI were included in the tariff.
“EERC and MainPower also reviewed all the relevant data/information provided by MainPower for its tariff determination to ensure accuracy.
“We are willing to entertain any evidence that shows that our methodology, analysis, computation and output are wrong. The total focus on the reduction of Band A tariff by some commentators is rather unfair to the Commission and to electricity consumers in Enugu State.
“It is important to say that with the ongoing migration of more customers to Band A, the general cost of delivering electricity is spread across larger customer numbers, which should also result in a reduced cost of service delivery.”
Continuing, the Commission added, “The emerging issue or question is: should customers in Enugu State be over-billed for electricity services and if so, for whose benefit?
