2019 tariffs not cost reflective – KEDCO

The Kano Electricity Distribution Company (KEDCO) on Friday opened up on the  Multi-Year Tariff Order (MYTO) minor review which the Nigeria Electricity Regulatory Commission (MYTO) released recently, saying that it is not cost-reflective.

In its Performance Improvement Plan (PIP) submitted to the commission, the power firm said that the targeted average cost reflective tariff is N62.94/kWh in 2020.

The document which was stumbled upon on yesterday said that in order to accomplish the PIP, the tariffs must be higher than the current tariffs that the NERC has set.

The power firm said that for business sustainability and full remittance of market bills, it is of utmost interest to all stakeholders that KEDCO be allowed the required Capex and to charge cost-reflective tariffs.

KEDCO said that: “To achieve the PIP, it is expected that tariffs would be higher than the current 2019 MYTO Minor Review tariffs set by NERC. The anticipated average cost reflective tariff is N62.94/kWh in 2020.”

The electricity distributor said that over  the horizon, the revenue received from this tariff would assist KEDCO to make the prudent investments (in collaboration with KEDCO’s stakeholder engagements) in the expansion, reinforcement and rehabilitation of its network to serve its growing number of customers in an efficient, reliable and safe manner.

Following the plan, the KEDCO’s expected output from the PIP execution would reduce actual losses from 49.31 percent  as at June 2019 to 17.21 percent in 2024.

It also target that it would increase  from 119,309 metered customers in 2019 to 594,309 in 2022; and reduce  interruptions from 1,624 per month in 2019 to 50 per month in 2024;

The KEDCO has targeted to connect an average of 48,000 new customers in years 2020 to 2024; and 100 percent market remittance over the planning horizon.

KEDCO is one of the PHCN successor companies covering Kano, Katsina and Jigawa franchised area within the North West area of Nigeria.

According to the plan, the company receives bulk of its power from 330/132kV Kumbotso Transmission Station as well as from Kwanar-Dangora and Funtua 132/33KV Transmission Sub-Stations.

In total, said the document, KEDCO receives supply from  twelve 132/33kV Transmission Sub-Stations, twenty-seven 132/33KV Transformers, fifty-seven 33kV outgoing feeders, fifty-four Injection Sub-stations, seventy-two 33/11kV transformers, and one hundred and fifteen operational 11kV feeders.

The document noted that to achieve  loss reduction trajectory, KEDCO has considered four scenarios from 2020 to 2024 and the potential impact on key performance indicators (KPIs) and expected output:

The four scenario are Regulatory allowed Capex, ATC&C loss reduction path and energy forecast; Regulatory allowed Capex, ATC&C loss reduction path and KEDCO energy forecast; Regulatory allowed Capex, KEDCO actual ATC&C loss reduction trajectory and its energy forecast; and KEDCO required Capex, actual ATC&C loss reduction trajectory and energy forecast.

 

Source: The Nation

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