Aba Power Limited Electric has applied to the Nigerian Electricity Regulatory Commission to increase tariffs paid for electricity in its franchise area by 123.33 per cent from January 1, 2025.
The company made the request for an upward review during a public hearing organised by NERC on the tariff review on Tuesday in Abuja.
APLE which is owned by Geometric Power Group, is a ring-fenced distribution company that provides electricity to Aba metropolis, consisting of nine local governments in Abia State. The company currently distributes power to 156,000 customers.
According to the company, the current tariff is no longer sustainable and is affecting its ability to provide efficient and reliable electricity supply to its customers.
The company is proposing a tariff increase from N223.12/kWh in 2024 to N263.08/kWh in 2025 for band A-Non MD, 240.09/kWh in 2024 to N283.09/kWh in 2025 for band A-MD1, N245.20 in 2024 to N289.11 in 2025 for A-MD2.
Also, the company proposed N213.74/kWh in 2024 to N252.03/kWh in 2025 for band B-Non MD, N233.13/kWh in 2024 to N274.89/kWh in 2025 for B-MD1, N237.71/kWh in 2024 to N280.29/kWh in 2025 for B-MD2.
For C-Non MD the company proposed N183.59/kWh in 2024 to N216.47/kWh in 2025, C-MD1 N207.06/kWh in 2024 to N244.15/kWh in 2025 and N208.89/kWh in 2024 to N246.31/kWh in 2025 for C-MD2.
A presentation by the team also stated that its price will increase from N148.14/kWh in 2024 to N174.67/kWh in 2025 for D-Non MD, N163.46/kWh in 2024 to N192.74/kWh in 2025 for D-MD1 and N148.14/kWh in 2024 to N174.67/kWh in 2025 for E-Non MD, N163.46/kWh in 2024 to N192.74/kWh in 2025 for E-MD1 and E-MD2 respectively.
If the application is approved by the Commission, the electricity tariff for non-maximum demand customers in Band-A would rise from N99.9/kWh to N223.12/kWh. The tariff for maximum demand (MD1) customers in Band-A would rise from N107.5/kWh to N240.09/kWh, while those in MD2 would pay N245.2/kWh instead of the current N109.79/kWh.
Compared to the tariff approved by NERC for other electricity distribution companies, customers supplied by Aba DisCo would pay N35.7/kWh more than consumers across the country.
However, the company argued for the increase because it did not benefit from the minor tariff review approved by NERC for other DisCos in December 2022.
It said the tariff review is tenable. It meets up with its operational cost with inflation impacting its business.
Speaking during the hearing, the APLE Managing Director of Ugo Opiegbe, said its operational cost has increased astronomically since the last tariff it was granted.
He said the previous review pegged its tariff charge for Band Non-MD customers at N99.90KWh, which is below the bills it is receiving from electricity generation companies supplying its power.
The MD said the review would enable it to recover its costs and invest in improving the electricity infrastructure, which would ultimately benefit consumers
He said, “Our request is based on the need to incorporate changes in macroeconomic parameters and indices which affect the quality of service, operations and sustainability of our company business. When we signed the PPA with the Niger Delta Power Holding Company sometime in 2022, NERC approved a tariff of N21KWh.
“Today, the last invoice we got from NDPHC was N136KWh. That’s the conundrum we have found ourselves in. That’s the major reason why we are here, pleading for NERC’s approval for this.
“The macroeconomic developments in the country have made it difficult for APLE to continue to operate under the current tariff regime.
“There are some dollar-backed projects we are working on and which will be difficult to realise if we continue operating under the current tariff regime.”
While stating that the consensus it generated from its customers indicated that tariff hike is not a major issue but availability of power which it is ready to provide when its tariff is increased to meet contractual obligations.
He added that the company had proved its status as a reliable electricity provider, having invested in the generation and distribution of electricity to the customers it served.
He said infrastructure has been one of its hindrances in going completely off-grid to supply electricity to its franchise area, but this would be solved in coming years when it gets its electricity from the Geometric Power Aba Limited, its sister company.
He went on to state that the current tariff has made it incur over N26bn debt to the NDPHC as its monthly invoice increased to N1.5bn, which it can pay N500m, while its invoice from GPAL is N1.2bn which it paid N700m.
Reacting to the request, the NERC Vice Chairman, Musiliu Oseni, reiterated the commission’s commitment to balancing the interests of consumers and service providers.
He said the commission would look critically at the parameters set by the company to arrive at the cost it proposed to ensure customers are exploited.
“The commission would look critically at the parameters set by the company to arrive at the cost it proposed to ensure that customers benefit from it. So when your customers are happy, they will be willing to pay more to you, so that you can also improve on your operational performance. I think that aspect, we need to look at it critically.
“It’s quite good that you already concluded the process. Before we allow your cost to be passed on to the end user, we will have to look at it and see whether problems it might cause or otherwise. This hearing is part of our effort to ensure that any tariff review is fair and reflects the realities on the ground. We will carefully review the submissions made here today before making a final decision,” he said.
The approval of the request is likely to increase the cost of living and doing business in the area.