CPPE Highlights Urgency in Addressing Electricity Value Chain Challenges

The Centre for the Promotion of Private Enterprises (CPPE) has emphasised the need to address some fundamental issues in the electricity value chain.

Its founder, Dr Muda Yusuf, advised on Wednesday in Lagos, in reaction to reports of electricity tariff increment for Band A consumers by the Nigerian Electricity Regulatory Commission (NERC).

The commission’s Vice Chairman, Mr Musliu Oseni, on Wednesday announced a tariff adjustment, resulting in Band A customers paying N225 per kilowatt-hour.

The development translates to a 241 per cent increase from the previous rate of N66 per kilowatt-hour for the 15 per cent of electricity consumers affected. Naira Devaluation Deepens Economic Crisis in Nigeria

Yusuf noted that issues of technical and commercial losses were yet to be addressed.

Additionally, he stated that matters of inefficient costs that consumers were compelled or expected to pay for as part of the cost recovery argument were pending.

According to him, these costs run into billions of naira.

“There is also the exploitative practice of estimated billing as millions of electricity consumers are yet to be metered.

“There is the problem of over-centralisation of the power supply through the national grid model.

“There are capacity issues with some of the electricity distribution companies, contributing to the lapses in electricity delivery outcomes.

“The energy mix programme is yet to gain an impressive traction. Hence, it is important to fix these fundamental issues in the power sector.

“Fiscal policy measures should be immediately deployed to reduce costs across the entire electricity value chain,” he said.

Yusuf noted that while the power sector issue had become a major conundrum in the economy and a tariff review was inevitable, an almost 300 per cent increase in one fell swoop was difficult to justify.

He, however, stated that the increase targeted at only 15 per cent of electricity consumers with the highest ability to pay would reflect some attributes of equity in pricing.

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