By John Ikani
Nigeria’s 36 state governors are calling for a major shakeup in the country’s electricity sector. In a policy document submitted to the Federal Ministry of Power, they propose a two-pronged approach: phasing out electricity subsidies and implementing a “no-meter, no-service” policy for new connections.
Ending Subsidies for a More Efficient Market:
The governors argue that electricity subsidies are ineffective and hinder a more efficient market. They believe that cost-reflective tariffs, reflecting the true cost of generation and distribution, are essential for a sustainable electricity sector. This would incentivize investment and improve service delivery.
Closing the Metering Gap with “No-Meter, No-Service”:
The governors highlight the critical need to address the significant metering gap in Nigeria. They propose a “no-meter, no-service” policy for new connections. This would ensure that all new customers are metered before receiving electricity service. This policy aims to improve customer billing accuracy, reduce losses for distribution companies, and encourage responsible electricity consumption.
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State Control Over Metering Decisions:
While advocating for mandatory metering, the governors suggest that State Electricity Regulatory Commissions (SERCs) should have the authority to determine the specific meter technology and type. This would allow states to consider factors like cost, existing telecommunication infrastructure, and varying customer needs across urban and rural areas.
The Challenge of Tariff Increases:
The governors’ proposal comes on the heels of a recent electricity tariff increase for customers with more consistent power supply. This move underlines the potential challenges associated with cost-reflective tariffs. Finding the right balance between affordability and financial sustainability will be crucial.
Moving Towards a More Stable Electricity Future:
The governors’ proposals aim to address long-standing issues in Nigeria’s electricity sector. By tackling the metering gap and potentially phasing out subsidies, they hope to create a more efficient and sustainable system that benefits both consumers and electricity providers. Whether these reforms can be successfully implemented and achieve the desired outcomes remains to be seen.
