Senate Orders Suspension Of Planned Electricity Tariff Hike

The Senate on Tuesday told the Federal Government to suspend the planned electricity tariff increase, expected to take effect in July, citing hardships caused by the coronavirus pandemic.

However, the upper legislative chamber lauded the Federal Government for its initiative to establish the N1.7 trillion COVID-19 Crisis Intervention Fund.

It also called on government, through the Federal Ministry of Finance, to include the electric power sector in the disbursement of the proposed N1.7 trillion COVID-19 Intervention Fund.

The senate’s resolution was a sequel to the adoption of a motion, sponsored by Sen. Gabriel Suswam (PDP Benue) on power sector recovery plan and impact of the COVID-19 pandemic.

Suswam, while leading debate on the general principles of the bill, said stable and uninterrupted power supply was a critical factor in the management of COVID-19 patients at isolation and treatment centres nationwide.

He stated that uninterrupted electricity was also key in the proposed upgrade of health facilities and the manufacturing sector of the economy.

According to him, if the negative impact of COVID-19 on the sector continues without any emergency financial intervention from the Federal Government, Distribution Companies (DisCos), may not meet their remittance obligation to the electricity tariff market.

He said the financial obligation of Generating Companies (GenCos) and gas to power suppliers would also be negatively impacted.

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Following supportive contributions of senators on the motion, the senate mandated its committee on power to investigate all interventions by government in the power sector since its privatisation to date and report back in four weeks.

It also mandated the committee to investigate the activities of all market participants in the sector.

The senate also told the Central Bank of Nigeria to allow operators in the sector access to foreign exchange for procurement of equipment and materials as obtained in both the aviation and oil industries.

The upper legislative chamber also urged the government to consider additional tariff support to cushion the effect of shock over a fixed period, to allow the Transmission Company of Nigeria and DisCos to access funds.

The Senate noted that the funds would help operators to implement their performance improvement investments that would support increased tariffs to certain classes of customers, especially during the pandemic.

The Senate President, Alhaji Ahmad Lawan, said it was obvious that the DisCos had no capacity at the moment to supply power to Nigerians.

Lawan noted that GenCos also had their challenges in generating electricity, adding that it was not a good commentary to continue to give money to the GenCos.

“The way it is, I think there is a need to review this privatisation and see what has happened because something is certainly not right,” the News Agency of Nigeria quoted Lawan to have stated. The senate, thereafter, adjoined its plenary to June 2.