Crazy electricity tariffs

Last week, the National Electricity Regulatory Commission (NERC) approved a 240 percent increase in electricity tariffs for electricity distribution companies, otherwise known as DISCOs, to charge their elite or Band ‘A’ consumers. Instead of the previous tariff of N66 per kilowatt hour, the elite consumers, presumed to be incapable of resisting the punishment, will now pay N225KW/h for receiving up to 20 hours of electricity supply per day. The objective is to reduce this year’s electricity subsidy by about N1.14trn and enable DISCOs to pay for gas and maintain their machines.

There is of course something to be said for discriminatory pricing, like fair tax payments. But to do it in such a way as to punish the poor for unavailable electricity supply and also punish the rich for the inefficiencies of the DISCOs is truly galling. So, rather than move in the direction of general 24 hours per day supply, NERC’s message is that both the poor and the rich should be punished for the inability of the transmission and distribution companies to stabilise power supply. In short, NERC has focused inelegantly and narrow-mindedly on the theory of pricing without a corresponding consideration of the implications of such price increases on the economy at a time of stagnating wages, high inflation, low production outputs, and general frustrations. The timing is wrong, and the policy irrational. Could they not rather stabilise power supply and find the right time to proportionally raise tariffs across the various segment of electricity consumers?