The Nigerian Electricity Regulatory Commission (NERC) yesterday announced a N244,844,000,000 revenue requirement in 2020 for the Transmission Company of Nigeria (TCN) Plc
It also forecast a N109,389,000,000 allowed recovery for the period while it estimated a tariff shortfall of N135,455,000.
The commission, however, noted that in 2019, the revenue requirement was N209,740,000,000; allowed recovery was N107,551,000,000, while the tariff shortfall was N102,000,000.
The review indicated a 16.74 per cent increase in revenue requirement, 17.09 per cent increase in allowed revenue requirement, and 32 per cent tariff shortfall.
According to the NERC, the federal government will in the interim subsidise the excess of the cost-reflective tariff and the actual payment from the end-users.
It was contained in the order No. NERC/GL/195/2019, that was titled “Before the NERC in the matter of the 2019 minor review of Multi-Year Tariff Order 2015 and minimum remittance on Market Operator’s invoice for the year 2020 for the Transmission Company of Nigeria Plc.”
The NERC noted that: “The federal government’s updated Power Sector Recovery Programme (PSRP) does not envisage an immediate increase in end-user tariffs until April 1, 2020 and a transition to full cost reflectivity by the end of 2021.
“In the interim, the federal government has committed to fund the revenue gap arising from the difference between cost reflective tariffs determined by the commission and the actual end-user tariffs payable by customers in line with the following.”
“a. All DisCos are obligated to settle their market invoices in full as adjusted and netted off by applicable tariff shortfall.
“b. The commission shall hold the TCN financially responsible for deviations from the economic dispatch order that adversely impact on the base weighted average cost of wholesale of energy as invoiced by NBET.”