27th September, 2011
Disturbed by the negative effect the planned hike in electricity tariff might have on the already impoverished Nigerians, the House of Representatives today initiated moves to halt the process.
The move to stop the planned increase is encapsulated in a motion sponsored by Hon Faparusi Bamidele (ACN Ekiti).
The motion is seeking a resolution of the parliament to direct Nigerian Electricity Regulatory Commission, NERC, to suspend the proposed plan to effect a major tariff review from January 2012, an increase in kilowatt an hour of electricity from N8.50 to N10 without an improvement in power supply.
Leading the debate, Bamidele argued that any increase cannot be done until every household is supplied prepaid metres which are precondition for the application of the Multi-Year Tariff Order, MYTO.
Bamidele pointed out that MYTO was introduced in 2008 in line with section 76 of the Power Sector Reform Act, specifically to ensure the predictability of electricity prices, and to mobilise funds to the industry by attracting the needed investment, while at the same time protecting consumers from unreasonable profiteering.
He wondered that while the MYTO provided for a 15-year tariff path with minor reviews each year and major reviews every five years when all inputs are reviewed with all stakeholders.
NERC had introduced the last schedule of 2008/2013 regime of the MYTO with effect from July 1, 2011 with the increase in charges per kilowatts/hour from N8.50 to N10.
He noted that the implementation of the MYTO was commenced in 2009 based on the assumption that power generation output would be around 10,000 megawatts by the end of the same year and further argued that out of the N177 billion earmarked for subsidy under the scheme, only N49.9 billion had been released for distribution to beneficiaries.
According to him, NERC had failed in its duty of ensuring efficiency of service providers as it relates to handling of customersâ€™ complaints among others, adding that poor Nigerians were continually paying the Power Holding Company of Nigeria, PHCN, for unmetered connections, with no power supply for over 70 per cent of the time.
Consequently, Bamidele prayed the House to mandate its Committee on Power to under-study the design and implementation strategy of the MYTO, determine its practicability and find out the utilisation level of the funds meant for subsidy under the MYTO.
The lawmaker also urged the House to mandate the Committee on Power to meet the Minister of Power and all relevant agencies with a view to ascertaining the level of implementation of the power sector reform, especially on privatisation.
The motion was referred to the Committee on Power without additional input from other lawmakers in accordance with the amended rules of the House which provides that the relevant committee scrutinises and makes the necessary legislative inputs on a bill or motion before it is returned to the floor for final approval of the general House.
The Deputy Speaker, Emeka Ihedioha, while committing the motion to the Committee said: â€œPursuant to Order 8 Rule 51 sub rule 5 of the House standing rules, the motion is hereby referred to the Committee on Power for further legislative input.â€
By Desmond Utomwen/Abuja