So, I finally got to the bottom of the whole electricity tariff increase wahala. I was surprised to read that representatives of the Distribution companies (DisCos) on Monday, rushed to Abuja on a private jet to lobby the legislators to postpone implementing

the increase in electricity tariffs because my experience has shown that DisCos fight against anything that favors the masses. So why are the DisCos lobbying against an increase after campaigning for an increase for 6 years?

Basically, the amount we are paying for electricity (N25/kWh for residential and N42/kWh for commercial) doesn’t cover the cost (N53/kWh), so the government has been subsidizing electricity by paying the shortfall.

The government has spent about N1.7 Trillion in the past 5 years on electricity subsidies so it was agreed that this was not sustainable and consumers needed to cover the cost.

Increasing tariffs was also a condition upon which the World bank approved a $750 million loan for the power sector. Nigeria agreed to that condition to get the loan. (E no dey hard us to agree)
The Generating companies (GenCos) have been complaining that it doesn’t matter

the amount of power they generate, the DisCos only request and pay for 3,000 to 3,500 MW leaving them with 4,000 MW (stranded power). They have a power purchase agreement that requires the DisCos to pay for both the energy and capacity,

but the DisCos say the market isn’t able to generate enough revenue to pay for more energy.
The GenCos are now threatening to down tools if the increase is not implemented citing their gas obligation and debt, cost of producing power that’s not utilized by the DisCos.

The increase in Tariff is meant to be based on supply as consumers were classified into 5 Bands, Band A, for those who receive on a daily basis 20 hours of power and above, B for those who receive 16 hours and above, C for 12 hours, D for 8 hours

and E for those who receive between 4 and 8 hours daily. Band E consumers will be unaffected by the increase. Consumers are able to demand compensation by reporting to the Nigerian Electricity Regulatory Commission (NERC) if the DisCos don’t supply the agreed number of hours.

It’s interesting to see that DisCos who have given outrageously inflated estimated bills to consumers for 6 years and have failed to meter consumers even after the cost of meters was passed to the consumers are now concerned that the Covid-19 pandemic has reduced

the spending power of consumers and that consumers cannot afford an increase at this time. The GenCos have accused the DisCos of keeping more revenue than they should. The DisCos had gone to court to stop a forensic audit of their finances.

So here’s my opinion:
The DisCos should focus on metering their consumers and stop swindling consumers in the name of estimated billing. Some people have stated that their estimated bills increased during the lock-down.

The cost of metering has been passed to the consumers yet, people aren’t getting metered. The federal government isn’t helping in this regard as the Nigerian Customs increased import duty on meters.

Most people are aware that we are not paying enough for electricity, Nigerians already pay as high as 80–100 Naira per kWh when running generators so I doubt they will be unwilling to comply with an increase in tariffs if they have guaranteed supply and pay for what they use.

In all of this, one thing stands out for me, everyone should be metered before any increase in tariff is implemented.

I have to add that the problems are multi-faceted and TCN cannot transmit more that 5,000MW no matter what GenCos produce.
Here's a small write up I did on the frequent grid collapse last year. https://medium.com/@ifeyinwal.anene/grid-collapse-opportunity-for-smart-grids-7ec5f7e71733