The Managing Director of Niger Delta Power Holding Company (NDPHC), Mr. Joseph Chiedu Ugbo, has said that the current N30/kw electricity tariff is not sustainable, hence the need for tariff hike.
Ugbo said this at the weekend when the Acting President Yemi Osinbajo visited the firm’s headquarters in Abuja to inspect the N-Power Call Centre.
He said there was the need for the federal government to heed the call for tariff hike by the Generating Companies (GenCoS) and other players in the energy sector.
He said consumers spend about N70 to privately generate a kilowatt hour of electricity whereas they pay less than N30 per kilowatt hour for public power supply.
“Part of the challenges we have is moving from social service through NEPA/PHCN because power was almost a social service before now; so we are moving from social service to market commodity.
“In market commodity the cost must reflect market production and return on investment they have made. So to that extent that is why they are clamouring for tariff increase. If there is a gap between the tariff and the cost, somebody has to pay for it
“So, are they going to be the rate payers or the tax payers through government revenue? The question is: does government have the money to pay that? We all know the situation we are in now, we all know the cost of our mainstay – oil – going down. I think we have to be realistic about that.
“I have seen certain consumers talk about ‘we are ready to pay but we want to see the power. So, it is the chicken and egg situation: if you don’t pay they are not going to get the needed money to make the investment to give you the power.
“But if you look back, a lot of homes, businesses in Abuja and Lagos pay more than N70 per kilowatt hour (on generators). What you pay now is less than N30 per kilowatt hour (for public power) and the grid provider is saying he wants you to increase marginally, it is not going to be N70 per kilowatt hour.
“At the end of the day when you compare, it is still going to be less expensive than your self generating power. The average cost of generating power is about N70 per kilowatt hour. So, if somebody is offering to give you this power but you have to pay more, not the N70 per kilowatt hour, I think in my view the rate payers have to seriously consider it.”
Ugbo said the current power generation and distribution in the country which hovers around 4,000 megawatts, is far below what is needed, adding that the recent N701 billion government’s bailout intervention to power generators to ease liquidity problems up to December next year would help ameliorate the situation.
