NERC allays customers’ fears on MYTO’s review

The Nigeria Electricity Regulatory Commission (NERC) says the stakeholders’ consultative forum on reviewing the frequency of Multi-Year Tariff Order (MYTO) is not meant to discuss electricity tariff review in the country.
NERC Vice-Chairman Sanusi Garba made the clarification at a meeting on review of frequency of MYTO methodology and eligible customer regulation in Abuja on Monday.
The forum is one of a series of two days stakeholders’ consultation meetings to be held in all the six geo-political zones and the FCT.
It is meant to enable the public to make input before NERC takes final decision on MYTO methodology, Eligible Customer and Business Continuity for Companies in the Nigerian Electricity Supply Industry (NESI).
MYTO is a tariff model that seeks to reward performance above certain benchmarks, reduces technical and non-technical, commercial losses and leads to cost recovery and improved performance standards for industry operators.
It provides a 15-year tariff path for the NESI with limited minor reviews each year in the light of changes in a limited number of parameters (such as inflation, interest rates, exchange rates and generation capacity) and major reviews every five years.
To this end, Garba said NERC was only consulting on the frequency of MYTO review, adding that the consultation had nothing to do with plan to review tariff.
He said the issues being considered on MYTO was on the frequency of reviews and end-users tariff compensation.
At the forum, there were divided opinions among operators on the frequency of methodology to be adopted.
Some stakeholders preferred the status quo to remain, others like Manufacturing Association of Nigeria (MAN) wanted yearly review, while some advocated monthly and quarterly review of the MYTO.
Chief Tomi Akingbogum, Chairman, Network For Electricity Consumers Advocacy of Nigeria, said it was important for NERC to be mindful of any decision adopted on frequency of MYTO methodology.
He said that there was the need to protect the interest of other investors in other sectors and ultimately the general public and not just operators in the electricity value chain.
“If we are not careful we are going to kill some of our industries by the frequency adopted to review MYTO.
The President, Hotel Owners Forum in the Federal Capital Territory, (FCT), Dr Eze Udeh, said that hotel owners were made to pay for the losses incurred in the electricity value chain of generation, transmission and distribution.
This, he said, was compounding the challenges of its members, adding that there was the need for the operators to bear their operational losses alone.
He said that it was important NERC to adopt the best method that would suit the interest of the consumers and the sector operators.
Dr Joy Ogaji, Executive Secretary, Association of Power Generation Companies (APGC), said it was necessary for NERC to consider enacting a framework to take care of the stranded power generated by the Electricity Generation Companies. (GenCos).
Ogaji said there was the urgent need to increase the transmission and distribution infrastructure in the country to accommodate electricity generated for end users.
Responding, Prof. Frank Okafor, NERC’s Commissioner for Engineering Performance and Monitoring, said stranded generation was a matter of concern in the sector.
He, however, said the completion of the eligibility customer regulation would address the issue of stranded generation in the sector.