Nigerians Pay Inefficient Price for Electricity

Nigerian Electricity Regulatory Commission (NERC) has admitted that consumers are paying inefficient price for electricity but attributed the situation to the unavailability of power supply.

Dr. Sam Amadi, NERC chairman,  who spoke in Lagos at a public forum between civil society groups and the commission, however assured that tariff would eventually reduce as generation increases.

He explained that overtime the fixed charge element in the tariff regime would come down, as the amount of electricity supplied improves.

“Power is unlike telecom where all you need to do is deregulate and you say come and buy spectrum which government auctions. Investors build their mast and become operational. “But in power the investor has to determine the market, who will buy the power at what price before beginning any investment. And it takes more than a year or two to get a plant going”, he said.

He said for the electricity sector to grow, there has to be intense investments into the sector which must also be afforded a time gap to mature, adding that “one mega watt of electricity cost $1 million to produce”.

He expressed the commission’s readiness to regulate the sector in the light of the new owners of the privatised Power Holding Company of Nigeria (PHCN) coming on stream.

“We are ready but readiness is not one off. We are a learning organisation and by next week we are going to have a retreat to analyse what we have done and how to bridge obvious gaps.

“Forums like this are meant to build the capacity of CSO to interact with the sector and built trust. It is fantastic that we have had two tariff increases without a major outcry, it shows that our interaction is working mainly because of credibility,” he stressed.

Speaking earlier, Adewale Adeoye, representative of the civil society coalition in the South West noted that energy provision is a major factor in the economic development and well being of Nigerians.

Adeoye explained that adequate provision of power determines the strength of the economy, the prowess of the manufacturing sector and the quantity and quality of trade and investment in the country.