In exercise of the powers conferred upon it by section 76(6) of the Electric Power Sector Reform Act 2005 and all other powers enabling it in that behalf, the Nigerian Electricity Regulatory Commission adopted the Multi Year Tariff Order (MYTO) methodology for electricity pricing in Nigeria, which sets out the basis and pricing principles and procedures for effecting minor and major reviews.
The MYTO provides 15-Year tariff path for the electricity industry, with minor reviews bi-annually in the light of changes in a limited number of parameters (specifically inflation, US Dollar exchange rate to Naira, natural gas price, available generation capacity and collection losses) and major reviews every 5 years, when all other inputs are reviewed with stakeholders.
Pursuant to Sections 7 of the three separate Tariff Orders (Generation, Transmission and Distribution), the Commission has commenced the process of bi-annual minor review of the tariff. The process involves the collection of data from National Bureau of Statistics, Central Bank of Nigeria and the System Operations Division of Transmission Company of Nigeria. The Distribution Companies are to provide evidence of the status of their respective collection losses.
In Carrying out the minor review NERC will adopt the following process:
Step1. Notice in Newspaper: Publication of intention to carry out a minor review on MYTO 2 in three national Newspapers (21 days for public response).
Step2. Review of public response to notice of intention: The Commission will collate and analyze the responses to the publication (Review within 10 days).
Step3. Gather data from Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) and System Operations Division of Transmission Company of Nigeria (TCN). The inflation and exchange rates data will be based on average of last six (6) months ending 30th March 2015. Also, the System Operator is to inform the Commission on the average available generation capacity for the last six (6) months (Data gathering within 12 days).
Step4. Update of the MYTO-2.1 financial model based on the data obtained from NBS, CBN and SO (TCN) (Within a day).
Step5. Public consultation and update of the financial model: Engagement of stakeholders in a discussion on their various inputs and suggestions (Within 12 days).
Step6. Consideration by the Commission of adjusted tariff: If the changes in exchange rate, rate of inflation and generation capacity results in excess of 5% increase or decrease in average tariff the Commission will consider and decide whether to increase or reduce applicable tariffs. Otherwise, no action is taken (1 day).
Step7. Release notice of the reviewed wholesale contract price, TUOS charge and retail tariffs: Publication of the results of the Commission’s review on the Commissions website and in three (3) national Newspapers. The decisions stated in the review (to increase or decrease or keep tariffs at previous levels will take effect from 1st June 2015 (3 days).
For full details of the MYTO Methodology and 2012 Tariff Orders please visit our website: www.nercng.org or click here . The public, stakeholders and any affected parties are hereby invited to send their comments or representatives to:
The Nigerian Electricity Regulatory Commission
Plot 1099, First Avenue, Off Shehu Shagari Way
Central Business District
P.M.B. 136, Garki
For further information, please contact: