The recent electricity tariff reduction by Enugu electricity distribution company (DisCo) has forced customers in other states to demand lower tariffs to reduce the surging cost of living.
Enugu DisCo has adopted a data-verification approach to electricity tariff setting to arrive at a tariff of N160 per kilowatt hour (kWh) for its Band A customers as against the current national composite average of N208/kWh or more.
Other states have hailed the model as a benchmark for transparency and accountability in Nigeria’s power sector.
Consequently, customers in other states have reacted angrily, with many accusing their DisCos of profiteering and inefficiency. In some urban centres, customers have taken to social media and community fora to declare boycotts of bill payments until their states replicate Enugu’s N160/kWh benchmark.
Read also: Enugu’s Band A tariff slash aligned with Electricity Act 2023 – Power Commissioners
“We won’t keep paying N210 or N225 per kWh while Enugu pays N160,” said Chimaobi Nnaji, a resident of Owerri. “What magic did they do there that our own DisCo can’t do?”
Kunle Ajibade, who is resident in Ikeja, Lagos, challenged his electricity distribution company to follow the Enugu model to cut the cost of electricity.
“I am in Band A and I also have my small nylon factory in the same area. So, I spend a lot on power, which impacts my cost of production negatively. I challenge my DisCo to find out what Enugu did and follow it to reduce the cost borne by customers like me,” he said.
Tope Alabi, a small business owner in Ibadan, Oyo State, urged his DisCo to explore the Enugu option to provide relief for citizens.
“What Enugu DisCo has shown us is that where there is a will, there is a way. DisCos should not close their minds but explore the model used by Enugu to help homes and businesses. If it works for Enugu, it can as well work for us,” he said.
“I spend over 100,000 every month on power. And that is even because I save energy. Imagine how lower electricity costs can help entrepreneurs like me to employ new workers, expand to new frontiers and drive innovation.”
Similarly, a Band A customer, Christiana Daniels, who lives in Kaduna, said her cost of living is soaring owing to the high cost of power.
“I do not make much profit these days due to the high cost of things, especially electricity,” Daniels, who is a trader, said.
“I am calling on DisCos to look at what has worked in Enugu and experiment it here. In Nigeria, businesses fight when it is about reducing prices but feel excited when there is an opportunity to increase them. Families and businesses are struggling, so DisCos must help them now.”
DisCos kick
However, DisCos have insisted that they are not magicians and that tariff reviews must be based on empirical data, not populist demands.
“We are open to tariff reductions—who wouldn’t be? But they must be data-driven and fair,” said Sunday Oduntan, executive director of Association of Nigerian Electricity Distributors (ANED), the umbrella body for all 11 DisCos in the country..
Oduntan expressed frustration over what he called ‘an emerging pattern of resistance’ among electricity consumers in states outside Enugu.
According to Oduntan, some customers outside Enugu State have begun to demand similar tariff reductions, while others have refused outright to settle their electricity bills, citing perceived injustice and inconsistency in tariff regimes across the country.
Read also: DisCos’ high electricity bills under scrutiny after Enugu’s tariff cut
“The electricity we distribute is generated and transmitted at a cost. When customers refuse to pay, they are undermining the sustainability of the entire value chain,” he noted.
Uncoordinated tariff review sparks backlash
The controversy began after the Enugu State Electricity Regulatory Commission (EERC) announced a significant reduction in electricity tariff for Band A customers, from the national average of over N200/kWh to N160/kWh, without coordination with the Nigerian Electricity Regulatory Commission (NERC) or other key players in the power sector.
Since the announcement, DisCos in other regions have reported mounting pressure from customers demanding similar tariff relief. In some instances, customers have gone as far as suspending payment of their electricity bills, awaiting a similar reduction.
“Customers in other states don’t want to pay bills,” said Oduntan. “They are pointing to Enugu and saying if their tariffs can come down, why should ours remain the same?”
Tariff reductions
The decision by Enugu DisCo has put DisCos in other states under intense scrutiny, with many state governments and consumer groups now pushing for similar reductions.
ANED insists that the Enugu model is not scalable nationwide due to the complexity of the national electricity market and the role of various federal agencies in tariff setting.
BusinessDay’s findings showed the Enugu tariff cuts emerged from a rare and rigorous process initiated by MainPower Electricity Distribution Limited, the local operator in the state, and supported by the state government. Initially proposing a tariff of ₦209/kWh, MainPower was instructed to revise and submit verifiable data to justify its cost structure.
After multiple engagements and a granular cost verification process, which included validating employee headcounts, asset inventory like transformers and administrative overheads, the tariff was reduced to N125/kWh, before settling at N160/kWh as a compromise.
“For the first time since 2014, a DisCo was made to provide actual, verifiable data,” said an industry source familiar with the Enugu negotiations. “The process didn’t tamper with the federal component of the tariff, generation and transmission, but focused only on the distribution segment, which is where MainPower operates.”
Read also: Enugu crashes Band A electricity tariff to N160/kwh
Where is NERC?
The silence of NERC, Nigeria’s apex electricity regulator, has further complicated matters. Industry observers said the commission has failed to enforce regular five-yearly tariff reviews, last conducted in 2014. A planned 2019 review was skipped, and the 2024 deadline has also passed without implementation.
This regulatory vacuum has left states like Enugu to act independently, albeit within the confines of the NERC tariff methodology, which was used but independently verified in Enugu.
“Enugu didn’t create a new method,” said a source in the ministry. “They simply did the job that the NERC was supposed to do: Verify costs and ensure that tariffs are based on actual service delivery, not inflated numbers.”
