The Nigerian Electricity Regulatory Commission (NERC) has at last openly barred its fangs on electricity consumers nationwide with its unethical, call it immoral, position on electricity tariffs under the cover of the Multi Year Tariff Order II (MYTO 2); even as the Federal Government continues to vacillate over handover date of the sold PHCN successor companies to the new private owners.
Just last month, the Chairman of the NERC, Dr. Sam Amadi, had openly declared that electricity charges would continue to be adjusted upward regardless of whether or not there was improvement in the supply of electricity to consumers; claiming that even organised labour was privy to the phased implementation of periodic increases in electricity tariff under the official warrant of MYTO II. The regulatory pricing mechanism that government has decided to call MYTO is an arrangement that allows the regulatory authority to continue to increase prices of electricity products even when there is no provision of electricity to consumers. The MYTO pricing mechanism celebrates the poverty of power infrastructure in the country by authorising the billing and collection of electricity tariffs from consumers for electricity not supplied.
In the opinion of the NERC boss, the continued upward pricing of electricity tariffs is actuated by the desire of government to encourage private investors to come into the electricity industry in order to revamp the decaying state of power infrastructure in the country. This can only be achieved, in his view, through the ordering of fixed charges so that whether there is electricity supply or not the power companies would continue to collect tariffs from the helpless consumers; and probably get a cut from the firms to generate revenue for government.
What all of this boils down to is that the NERC is surreptitiously loading the prepayment meters in such a way that revenue would continue to accrue to the electricity industry even when the mega watts of electricity generated and supplied nationwide dip down from 4,000 to as low as 1,500 mega watts. The MYTO dispensation, the way Sam Amadi has interpreted it and the way he is implementing it is such that if the power companies cooperate with government, they would not need to generate and supply any mega watt of electricity to net substantial income into their coffers from the hopelessly wounded and exploited users of electricity; provided the consumers are connected to either the old analogue post-payment or the new digital pre-payment meters. The trap of the Amadi implementation of the MYTO is that whether you are billed directly without meter or billed the old meter reading or the pre-payment metering, you would not be able to escape paying for electricity not supplied and not used.
The MYTO has made it possible for Sam Amadi to compel people to pay for electricity service not delivered by either the Power Holding Company of Nigeria—PHCN—or the new core investors, because of the huge fixed charges built into the pricing mechanism. The serious danger in this which I urge civil society and organised labour to combat is that there would never be improvement in electricity service delivery in the country if government agencies and power investors are allowed by regulatory law to collect fixed charges. MYTO should be restructured to make the collection of any tariff on electricity to be solely dependent on the kilo watt hour of electricity consumed by users.
This is so because consumption-dependent tariff regime will force the operators in the power sector whether they be government agencies like PHCN or the new core investors to go back to work to generate and distribute enough mega watts of electricity which will then make it possible to net the real income from service delivery; not from officially concocted revenue extorted from fixed charges on services not rendered.
It is therefore my humble suggestion that the NERC should go back to the drawing board to review the MYTO pricing mechanism if indeed it has not been rendered otiose by the unbundling of the PHCN. Fixed charges on electricity is unethical, highly immoral, as it would hamstring government from effectively regulating enterprises in the country. A government that encourages the fixing of charges for services not rendered to users of electricity is unwittingly and immorally embarking on the legitimisation of a rapacious exploitation of consumers; and it would be an uphill task for such a regime to regulate the profit motive of the private sector.
Those who run government institutions should lead and regulate by examples. If the NERC regulators are the ones at the receiving end of the MYTO pricing mechanism, would they accept to pay fixed charges for services not rendered? Government agents or public officers should not drive Nigerians, by the administration of immoral laws, to resort to self-help. A resilient people should not be taken for granted, for resilience has a point of inelasticity. The FG should hand over the sold distribution and generation companies to their new private owners and leave them with some form of regulation to provide services and charge appropriate tariffs for electricity actually consumed by users.
There should be no fixed charges for electricity tariffs; and where administrative charges are necessary, it should be done minimally because the market is extremely large. Huge and genuine revenue will accrue to investors in the power sector if they generate, distribute and transmit enough mega watts of electricity for millions of electricity users in the country. Any money extorted from electricity consumers for services not delivered is blood money and the cries of millions of defrauded Nigerians will not go unattended on the day of reckoning.
Let the NERC reverse itself and tell its masters that the rising fixed charges of electricity is immoral and should be discontinued in the interest of good governance and global best practices. You do not collect fixed tolls for nonexistent services; and the moral burden is worse if it is perpetrated by government which should regulate motives and protect the public from the rapacious exploitation of the capitalist mode of production and arbitrary charges.
