…Electricity Tariffs Increase

By Ubong Ukpong, Abuja

Against the backdrop of widespread condemnation that greeted the planned electricity tariff, the House of Representatives, yesterday firmly rejected the Nigeria Electricity Regulatory Commission’s (NERC) attempt to approve an increase in electricity tariffs in the country, citing concerns over the burden this would place on Nigerian citizens.

The resolution, passed at the plenary in Abuja yesterday, followed a motion presented by the Deputy Minority Whip, Rep Aliyu Madaki.

The lawmaker highlighted that DISCOs recently alerted customers of an impending electricity tariff hike, attributing it to the Multi-Year Tariff Order (MYTO). A circular issued by the distribution firms indicated that effective July 1, 2023, there would be an upward review of electricity tariffs influenced by fluctuating exchange rates.

Madaki pointed out that the MYTO 2022 guidelines could lead to a significant tariff increase, with different categories of consumers experiencing varying price hikes. He noted that consumers within Bands ‘B’ and ‘C’ with supply hours ranging from 12 to 16 hours per day would pay N100 per KWh, while Bands ‘A’ with 20 hours and above would face comparatively higher tariffs. Customers with prepaid meters might also experience a substantial increase, while those on estimated billing would likely be impacted as well.

The lawmaker also raised concerns about the confusion caused by the Abuja Electricity Distribution Company (AEDC) retracting their earlier notice of the tariff increase. He emphasized that members of the public were now uncertain about the actual situation.

Madaki further argued that the proposed increase comes despite the operators’ inability to meet the threshold of supplying at least 5,000 megawatts per year, as agreed upon in the contract with NERC. He deemed it insensitive to propose such a significant price hike at a time when many Nigerians were still grappling with the removal of fuel subsidies.

During the discussion on the motion, other lawmakers, including Rep. Babajimi Benson (APC-Lagos), Rep. Olumide Oshoba (APC-Ogun), Rep. Satomi Ahmed (APC-Borno), and Ali Isa JC (PDP-Gombe), expressed their concerns and called for caution. They pointed out that Nigerians were already facing significant challenges due to the fuel subsidy removal, and any tariff hike for electricity would add to their burden.

In light of the public outcry, the House adopted the motion, mandating its Committee on Power (when constituted) to engage with NERC to find a mutually acceptable solution and address the proposed tariff hike in the best interest of Nigerians.

Orders CBN to Explain Transactions on Excess Crude Account

The House of Representatives has urged the Central Bank of Nigeria (CBN) to reveal without delay, all the interests and principal sums on the investments in the Excess Crude Account (ECA) Petroleum Profits (PTT) and Royalty Account to the Auditor-General for the Federation’s Office.

The call was sequel to a unanimous adoption of a motion by Rep. Esosa Iyawe (LP-Edo) at plenary yesterday.

Moving the motion earlier, Iyawe said that the CBN is the banker to the Federal Government’s Banker and custodian of investment vehicles, including the PPT and the ECA among others.

He said that the 2015 Annual Report of the Auditor-General for the Federation showed that an interest of One hundre and $1.82 million dollars was deposited in the ECA as interest on Investments.

According to the lawmaker, there were no details as regards the principal sums deposited, the tenor and the interest rate.

“The CBN has flagrantly and consistently refused the requests by the Auditor- General for the Federation to disclose the details regarding the management of interests accruing from the PPT/ Royalty and Foreign Excess Crude Account;

“Reports which revealed unapproved and indiscriminate withdrawals from the ECA, including current year expenditures, fuel subsidies, debt financing and power projects, all of which are outside the fund’s mandate.

“Disturbed that the 2016 audit report revealed the disappearance of over $9.5 million interest accrued from the PPT investment,” he said.

Iyawe said that obscurity has consistently characterized the management of interests accruing on Federal Government investments, which is in contravention of the accountability principle, and points to misuse of much-needed government funds.

The rep said that the ECA has been riddled with controversy, allegations of corruption, and uncertain performance.

According to him, its absence of rules governing deposits, withdrawals and investments led to the Natural Resource Governance Institute ranking Nigeria as the second-most poorly governed fund among 34 resource-rich nations.

He said that over the years, the ECA has consistently borne allegations of mismanagement along with a barrage of lawsuits challenging its legality as there is no law backing it.

Iyawe said that experts have raised concerns several times over ECA’s balances which seem to change at will without any corresponding evidence of withdrawals or approvals of such withdrawals.

He said that the lack of transparency from the CBN has significantly affected the revenue accruable to the Federation Account, as well as undermines the Federal Government’s efforts to plug leakages, reduce corruption, and improve revenue for the Federation.

The house resolved to set up an Ad-hoc Committee to determine the legality of ECA and investigate the status and management of all the principal sums deposited, tenor, and interest rate of the PPT/Royalty and ECA from 2015 to date.

In his ruling, Deputy Speaker Benjamin Kalu, mandated the committee, when constituted to ensure compliance.