Aba Power Seeks 123.33% Electricity Tariff Increase From January 2025

Aba Power Limited Electric (APLE) has formally applied to the Nigerian Electricity Regulatory Commission (NERC) for approval to increase electricity tariffs in its franchise area by 123.33%, effective January 1, 2025.

During a public hearing organized by NERC in Abuja on Tuesday, the company attributed its request for an extraordinary tariff review to factors such as inflation, rising exchange rates, and high operational costs.

If approved, the tariff adjustment will see non-maximum demand customers in Band-A paying N223.12/kWh, up from the current N99.9/kWh. Maximum demand (MD1) customers in Band-A would experience a rise from N107.5/kWh to N240.09/kWh, while MD2 customers’ tariffs would increase from N109.79/kWh to N245.2/kWh.

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These proposed rates surpass the average tariffs approved by NERC for other electricity distribution companies by N35.7/kWh, according to comparative data. APLE, however, argued that it was excluded from the minor tariff review granted to other DisCos in December 2022, leaving it at a disadvantage.

Speaking at the hearing, APLE’s Managing Director, Mr. Ugo Opiegbe, justified the proposed hike, citing the need to ensure improved and stable power supply to customers in Aba. He outlined the basis for the application, including a projected inflation rate of 25%, an exchange rate of N1,654.2/$, an average energy offtake cost of N135/kWh, and annual operational expenses of N189.6 billion. The company expects to generate N227 billion in revenue by 2025.

According to Mr. Opiegbe, the bulk of the company’s electricity will be sourced from the Aba Independent Power Plant, operated by Geometric Power, with additional supply from the Alaoji Power Plant, owned by the Niger Delta Power Holding Company (NDPHC).

In his remarks, NERC’s Vice Chairman, Musiliu Oseni, emphasized the need for improved service delivery, stating, “When your customers are happy, they will be willing to pay more, enabling you to enhance your operational performance. Before we allow your costs to be passed on to the end-user, we will critically examine the potential impacts.”

NERC assured stakeholders that it would carefully evaluate the application, taking into account the various industry factors and presentations made during the hearing, before delivering a final decision.