Reason: The investors have embarked on serious lobbying of the government to allow them increase tariff as soon as possible.
A PHCN investor, told The Guardian in confidence that there have been series of meetings with the Nigeria Electricity Regulatory Commission (NERC) to grant them permission to increase electricity tariff at the end of the privatization exercise.
According to him, the investors have invested so much on the assets and they are still borrowing to ensure smooth running of the PHCN assets and felt tariff increase was necessary.
Confirming the latest development, Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi, said the agency had been contending with pressure from the new owners of PHCN assets, adding that one of such demands was for the increase in electricity tariff.
According to Amadi, who was represented by the Secretary to NERC, Mrs. Ada Ozoemena, at World Stage Power expo recently in Lagos, the investors based their demand on the assumptions made by the commission in the Multi-Year Tariffs (MYTO), which they said was inaccurate.
He said: “The new investors are already asking for an increase in tariffs and they have some reasons, which are valid. They have told us that the assumptions that went into the MYTO were inaccurate. Of course, we used 40 to 50 per cent loss in transmission. So, they are asking for increase in tariff. We have been holding roundtable discussions with them.”
Amadi stated that as a commission, NERC had told the investors that any tariff increase for now would be suicidal, stressing that the agency was still defending the last increase in tariff.
“But we have been talking to them, telling them that they have to take over these companies first; they have to try and be seen to have done something before we can even hold discussions on another tariff increase. So, that is where we still are,” he added.
He stated that NERC and the investors were also trying to sort out the accounting issues of the successor companies.
“The energy has been paid for to the PHCN companies. So, these new owners that are coming in want to make sure they get their money. But I have been told it is an accounting process,” he said.
Information from The Guardian was used in this report.