The Ikeja Electric Distribution Company (IE) will from April 1st, 2020 increase its tariff rates by 50 percent.
This it confirmed in a letter to Nigerian Electricity Regulatory Commission (NERC) seeking its approval to go ahead with its extraordinary tariff review of the multi -year Tariff order agreement of 2015.
The Electricity Regulatory authority, in its December 2019 Minor Review of Multi Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 for the 11 Discos, had said on January 4 of this year that electricity consumers would start to pay more for electricity from April 1, 2020.
As reported by the PUNCH, Ikeja Electric further explained in its letter by saying “The objective of the extraordinary 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 per cent from April 1, 2020 in order to meet the tariff shortfall funding target for 2020 by the Federal Government of Nigeria.”
It added that it had designed the tariffs based on the MYTO tariff model contained in a document, titled ‘Ikeja Disco Tariff Model January 2020’, which the commission shared with it.
It 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 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 Disco said the 50 per cent tariff increase was expected to raise the average tariffs from the current level of N27.30 per kilowatt-hour to N40.95 per kilowatt-hour.