Power, Insights

A Brief Analysis of Tariff Reviews in the Nigeria Electricity Supply Industry (NESI)

Recently, the 11 Discos in Nigeria filed an application for rate review with Nigeria Electricity Regulatory Commission (NERC), premised on the need to incorporate changes in macroeconomic parameters and other factors affecting the quality of service, operations, and sustainability of the companies. Following this, NERC invited interested stakeholders for comments on the rate review application. This application by the Discos was made pursuant to the Multi-Year Tariff Order (MYTO) 2022 guidelines2 issued by NERC to the 11 Discos.

The MYTO 2022 approves a 5-year CAPEX, with relevant assumptions applied to forecast revenue requirements and applicable tariffs for the period of 2021-2026 in line with the MYTO Methodology and Regulations on Procedure for Electricity Tariff Reviews in the NESI. The said application for rate review by the Discos has however, attracted criticisms from consumers, and a rejection from the House of Representatives, who have labelled this move by the Discos as being inconsiderate in view of the present financial hardship caused by the removal of fuel subsidies by the Federal Government of Nigeria.
Against this backdrop, this article discusses the power of NERC to approve a rate review application by the Discos, and the basis upon which such an application can be made…

 

 

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