Understanding Nigerian Electricity Regulatory Commission's Recent Tariff Increase and Its Implications for Nigerian Electricity Consumers.

NERC has established a national "Band A" power consumer rate of N225 per Kilowatt hour. This move signifies a substantial departure from electricity subsidies within the Nigerian Electricity Supply Industry (NESI), given the continuous challenges posed by extensive power outages nationwide.

Nigerians must understand the key characteristics of the recent development, which follows the Nigerian Electricity Regulatory Commission's (NERC) approval of a massive 240% increase in electricity tariffs. 

1. For "Band A" users, the power tariff increased by 240%, approved by NERC, from N66 to N225 per kilowatt hour (KwH).

2. Customers who receive a 20-hour or longer power supply are the aim of this expansion; they make up less than 481 feeders out of over 3,000, or 15% of Nigeria's 12 million energy users.

3. NERC requires feeders that fail to fulfil the 20-hour supply standard to be demoted, which lowers the number of "Band A" feeders from over 800 to around 500.

4. Due to better power supply, "Band A" clients may see a significant increase in their monthly electricity prices, which might range from N50,000 to N170,000 depending on consumption patterns. This increase could potentially balance costs associated with diesel and petrol generators.

5. According to NERC, only "Band A" consumers are guaranteed a minimum of 20 hours of power delivery from the 11 electricity distribution firms.

6. The tariff rise has no effect on customers in "Band B," "C," "D," and "E," who receive less than 20 hours of power supply, thus their electricity costs will not go up.

7. The 240% rise means that "Band A" customers—who account for 15% of Nigerian urban homes and 40% of the nation's electricity consumption—will no longer get any electricity subsidies.

8. On Wednesday, April 3rd, 2024, Discos began implementing the new electricity rate, which resulted in 'Band A' customers paying 240% extra for electricity.

9. In January 2024, customers in all bands experienced inconsistent power delivery, which the Minister of Power, Adebayo Adelabu, blamed to gas limitations. This occurred despite the pricing hike.

10. The classification system divides consumers into several bands according to the guaranteed minimum daily electricity provision, which establishes the anticipated hours of power delivery each day.

11. Customers who are presently on Band A tariff may still be demoted if the distribution business is unable to meet the minimum supply requirement of 20 hours per day for an extended length of time.