Fashola: Law makers can't stop the increase of electricity tariffs

Minister of Works, Housing and Power, Mr Babatunde Fashola

Minister of Works, Housing and Power, Mr Babatunde Fashola, on Tuesday, said the National Assembly lacked the power to stop the National Electricity Regulatory Commission (NERC) from reviewing electricity tariffs.


Fashola, who stated this while speaking with National Assembly correspondents, said the law setting up the commission empowers it to review tariffs upwards or downwards.

He said relevant laws backing NERC were passed by the National Assembly, adding that “the law passed by the National Assembly clearly gives NERC the responsibility and power to give a tariff that enables them to recover their investment and returns on investment.

“So nothing unlawful or illegal has happened. I think it was the way it was managed before we came and the review every two years,” he said.

The House of Representatives had, in December, ordered the NERC to stop the implementation of its new tariff, pending some investigations.

Speaking with newsmen, Fashola, however, said “people have been hearing for the past 20 years that power projects are over 990 per cent complete. It is absolute nonsense. As far as I am concerned, the ultimate thing is to get into work.

“One per cent or 99 per cent, we need to get it to work and the best way to get it to work in the interest of Nigerians is to enter into any form of partnership and we will look into that.

“It is not about what I think and I said this much before. Elecricity is a product. It is made from raw materials. Some of the raw materials are gas, some of the raw materials are power plants and they are also related.

“So, the issue of tarrif is the single issue of price. When the raw materials go up, the price cannot stay the same. You may ask why can’t we have more power before the price goes up?

“I am also a consumer, but we see that investments in power are not where they should be and part of the reason why government opted for privatisation was to get more private capital.

“There are a lot of investors who want to pay a little more than the open market tariff. If we want them to come into the industry, we have to allow the new tariff order, which allows for embedded order.”

Fashola said what was on the ground now was a 10-year tariff, adding that it was not going to be changing every two years.

Fashola also said given the various plans undertaken by the present administration in the sector, power generation would increase with additional 2,000 megawatts by the last quarter of the year.

He disclosed this at the ministry’s budget defence before the Senate Committee on Power and Mines, even as he noted changes in the management of power in the country in recent times.

In a statement issued in Abuja by the Assistant Director of Press Unit,  Etore Thomas, the minister said the 2016 budget focused more on the transmission, completion of ongoing projects, refurbishing power plants and tackling gas supply issues.

He explained that if all these were addressed, the expected projection would boost electricity generation in the country.