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AEDC customers reject proposed hike in electricity tariff

By NAN   |   29 September 2015   |   8:53 pm  

power21-300x225Electricity consumers in the Federal Capital Territory (FCT) and its environs, have rejected a proposed hike in electricity tariff being proposed by the Abuja Electricity Distribution Company (AEDC).

They made their position known in separate remarks at an extraordinary consultative forum organised by the company to inform customers of the proposal.

The Managing Director of AEDC, Mr Neil Croucher, had proposed an upward review of tariff over a period of 10 years to address the “huge backlog of under investment in the sector.’’

Mr Tomi Akingbogun, the Interim President, Nigerian Electricity Consumers Advocacy Network (NECAN), said the proposed increment was unnecessary and illegal.

Akingbogun said: “There is no need for this increment. As we speak, only 40 per cent of electricity consumers in the AEDC catchment area are paying their bills.

“Now, the company is using that 40 per cent to say that they are not making enough money. Is it my business to go to their customers and get money from them?

“The Nigeria Electricity Regulatory Commission (NERC) should be taken up on why they are allowing this.’’

He said that it was the second time that the company was asking for upward review in tariff this year, the first being in February.

“They did one in February, but the law permits only minor reviews every six month until 2017.

“Are they telling us that 49 to 60 per cent increment they are asking for is a minor review? This is totally wrong.

“Let us reject it and tell NERC that something is wrong in what they are doing.

“This forum is just to show our face that the public has been consulted and so the increment is justified, but we are saying no,’’ he said.

Akingbogun advised all the customers who attended the forum to individually write to NERC to formally reject the proposed hike.

Others, who spoke at the occasion, raised several issues in the sector including estimated billing, fixed charges, electricity rationing and lack of repair of and maintenance of facilities, among others.

They accused the company of extortion though excessive billing them for power not supplied even after providing transformers, poles, cables and other facilities in some cases.

Responding to the issues, Croucher AEDC managing director, called for understanding, saying that the challenges in the power sector were more complicated than they thought.

He said: “we need a tariff which is certain and firm over a long period because we need to borrow huge amount of money to fund our capital programme.

“There is huge under investment for the past years and decades. In our case, we need about 300 million dollars over the next five years of our capital programme.

“We also need to borrow money because in the early years we will be under-recovering even with the tariff increase that we are putting forward.

“The tariff being put forward is a regulated tariff; there is no opportunity for us to make exorbitant profits out it. Tariffs will come down as the level of generation increases.’’

Croucher stated that revenue collected by distribution companies from customers were used to fund the entire electricity supply chain.

According to him, distribution companies retain only 25 per cent of the revenue, while the balance of 75 per cent goes to the generation and transmission companies as well as the regulators.

“We are responsible for collecting 100 per cent of the money that comes into the power sector. Of that money we only get to retain only 25 per cent.

“The balance is used to feed the supply chain upstream. The transmission company gets 11 per cent, the bulk of it goes to the GENCOs and the other amounts goes to the regulators.

“It is important that the whole supply chain is healthy financially. If any part of it fails, then the power sector will fail.

“So we need to ensure that as part of the process we create a healthy supply which is sufficient to meet the cost in a regulated way,’’ he said.



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