Electricity Tariff Lowest In Africa As Togo, Benin, Niger Owe $14m

Despite $14.01m in electricity debts by Togo, Benin, and the Niger Republics, Nigeria still maintains the lowest electricity tariff in West Africa, a report from the Nigerian Electricity Regulatory Commission (NERC) has revealed.

According to NERC’s 2024 Annual Report, the three West African power utilities, Nigerienne d’Électricité (NIGELEC) of the Niger Republic, Société Béninoise d’Energie Electrique (SBEE) of the Benin Republic, and Compagnie Énergie Électrique du Togo (CEET) of Togo, failed to remit $14.01m for ancillary services provided by the Nigerian electricity market in the year under review.

The report stated that the three utilities were invoiced a total of $56.07m for services rendered by the Market Operator (MO), an arm of the Transmission Company of Nigeria (TCN).

However, the trio only remitted $42.06m, representing a remittance performance of 75.01 per cent, leaving an outstanding balance of $14.01m.

Also, the statement stated that the average allowed end-use customer tariff in Nigeria was US$0.07/kWh (approximately ₦100.27/kWh).

This figure represents just 35.71 per cent of the US$0.19/kWh average tariff charged in other selected West African countries.

Despite the seemingly low rates paid by Nigerian customers, the actual cost of supplying electricity, known as the cost-reflective tariff (CRT), stood at US$0.12/kWh (₦175.31).

According to the commission, the CRT in Nigeria was only 63 per cent of the average rate in the reference countries, further underlining the scale of the government’s intervention to bridge the pricing gap.

NERC noted that the widening difference between the allowed tariff and the CRT resulted in an average subsidy of ₦75.04/kWh in 2024, one of the highest in recent years.

The report also revealed wide disparities among Distribution Companies (DisCos) across the country.

The commission stated that Yola DisCo recorded the highest cost-reflective tariff, a trend attributed to heightened operational costs, vandalism, and security challenges in its service territory.

However, with an allowed tariff still pegged at the national average, Yola DisCo benefited from the highest per-unit subsidy, receiving nearly twice the average subsidy per kilowatt-hour (kWh) compared to other DisCos.

In contrast, Ikeja and Eko DisCos operated with relatively lower CRTs and, consequently, lower subsidy allocations per unit of electricity delivered.

THE WHISTLER had earlier reported that the Federal Government’s electricity obligation was ₦91.63bn in the last quarter of 2024.

The federal government’s rising subsidy burden stems from the gap between the allowed end-user tariffs and the actual cost-reflective tariffs.

The tariff freeze at December 2022 rates was in effect throughout 2024, and the Federal Government incurred a ₦633.30bn subsidy in Q1 alone, a 303 per cent increase over the 2023 quarterly average of ₦157.15bn.

However, the upward tariff review for Band A customers in April 2024 helped reduce the subsidy to ₦380.06bn in Q2; a new directive freezing tariffs at July rates for the remainder of the year reversed this progress.

The subsidy obligation, however, rose again in Q3 and Q4 by ₦84.06bn (+22.12 per cent) and ₦91.63bn (+24.11 per cent), respectively, in 2024.

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Enugu Tariff Cut: Power Firm Blames Outage On Energy Drop

Tope SUNDAY

The management of Mainpower Electricity Distribution Limited (MEDL) has attributed the four-day power outage affecting parts of Enugu State to a drastic drop in energy allocation from its parent supplier, Enugu Electricity Distribution Company PLC (EEDC).

THE WHISTLER recalls that the Enugu State Electricity Regulatory Commission (EERC) recently slashed the electricity tariff for Band A customers under its jurisdiction from ₦209.50/kWh to ₦160.40/kWh.

The development has drawn backlash from federal regulators and other stakeholders who argued that such decisions, in the absence of coordination, threaten the sustainability of the national electricity supply industry (NESI).

But MEDL, in a statement on Monday, stated that the energy reduction followed the issuance of a new Tariff Order that has strained its supply arrangement.

However, it noted that the development prompted EEDC to undertake a financial analysis of the tariff reduction.

MEDL clarified that it does not receive electricity directly from the national grid but relies solely on EEDC, which holds the vesting contract with the Nigerian Bulk Electricity Trading Plc (NBET).

The company admitted to delayed communication with customers, citing the short notice with which it received the full briefing on the tariff-related issues.

“Mainpower Electricity Distribution Limited (MEDL) wishes to inform its esteemed customers in parts of Enugu State who have been experiencing power outages over the past four days that the situation is due to a significant drop in energy allocation from our parent company, Enugu Electricity Distribution Company PLC (EEDC).

“This development is a result of the recent issuance of a new Tariff Order to Mainpower by the Enugu Electricity Regulatory Commission (EERC).

“After analysing the implications of the new tariff, EEDC concluded that implementing it would result in a monthly loss of over N1 billion, which makes it impossible for EEDC to meet its obligations to the Market.

“Consequently, and to mitigate these losses, EEDC made the difficult decision to reduce the volume of energy supplied to MEDL. This has unfortunately resulted in MEDL receiving only about 50 per cent of its usual energy allocation, significantly affecting our ability to serve some of our esteemed customers.

“It is important to clarify that MEDL does not receive electricity directly from National Grid. Instead, we rely solely on EEDC, which holds the vesting contract agreement with the Nigerian Bulk Electricity Trading (NBET), the organisation responsible for electricity bulk trading.

“We deeply regret the inconvenience this situation has caused our valued customers. Please be assured that discussions are ongoing with key stakeholders at the state and federal levels (including EEDC, EERC, NERC, NISO, and NBET) to quickly resolve this issue. We are hopeful that a resolution will be reached within the next 48 hours or soon thereafter”, the company stated.
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Electricity Tariff Lowest In Africa As Togo, Benin, Niger Owe $14m is first published on The Whistler Newspaper