Ikeja Electric (IE) says its electricity tariff will increase by 50 percent from April 1.
This is contained in a memo on the company’s performance improvement plan and application for extraordinary tariff review of MYTO submitted to the Nigerian Electricity Regulatory Commission (NERC).
In January, the regulator announced a review of the multi-year tariff order (MYTO) 2015 and the minimum remittance order (MRO) for the 11 electricity distribution companies (DisCos) from April.
Ikeja Electric said the 50 percent increase is expected to raise the average tariffs from the current level of 27.30 N/kWh to 40.95 N/kWh.
“The objective for the extra-ordinary tariff review of MYTO 2015 is to ensure Ikeja Electric adjusts its tariff in line with the Commission’s directive that current average allowed Disco tariffs shall be grossed-up by 50% from 1st April 2020 in order to meet the tariff shortfall funding target for 2020 by the Federal Government of Nigeria (FGN),” the company said.
“In this application, we intend to create a new tariff class, called Bilateral; a class that is being created for customers that IE has signed Power Purchase Agreement (PPA) with under a willing-buyer-willing-seller arrangement.
“In order to provide an efficient and reliable service to customers in this tariff class, cost-reflective tariffs are required to cover the cost of service delivery.
“The expected MYTO 2020 and bilateral revenue requirement, are N162bn and N8bn respectively, to give a total revenue requirement of N170bn. The 50% tariff increase is expected to raise the average tariffs from the current level of 27.30 N/kWh to 40.95 N/kWh.”
NERC in a report said the power sector recorded ₦1.72 trillion tariff-related revenue shortfall from 2015 to 2019.
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