The proposed increase in electricity tariff has been a pending issue. Several calls have been made by experts on the need to introduce the new cost reflective tariff early enough to foster better service delivery by the distribution companies to their franchised customers. From their perspective, these experts believe that the present tariff structure is not sufficient to support commercial operations of distribution companies. Conversely, there have also been calls by several civil right groups militating against this development.
Another expert who has joined her voice in the call for the enactment of the cost reflective tarrif, which would significantly lead to the increase in tariff is the chief executive officer of Benin Electricity Distribution Company, (BEDC) Mrs. Funke Osibodu.
Mrs Funke noted that the increase in electricity tariff is inevitable, judging from the standpoint that the present tariff structure is not sufficient enough and hence not susbstainable. She also urge Nigerians to expect an adjustment which will come at any time. she said implementation of the Multi Year Tariff Order, MYTO, is key to promoting quality services and efficiency in the system.
The Multi-Year Tariff Order (MYTO) is a tariff model for incentive-based regulation that seeks to reward performance above certain benchmarks, reduces technical and non-technical/commercial losses and leads to cost recovery and improved performance standards from all industry operators in the Nigerian Electricity Supply Industry. The Nigerian Electricity Regulatory Commission, (NERC) set a new tariff for DISCOs for 2015-2024, which requires consumers in different categories and location to pay different charges for each.
The MYTO is a model used to set wholesale and retail prices for electricity in the industry by employing a unified way to determine total industry revenue requirement that is tied to measurable performance improvements and standards. The purpose of the MYTO is to set cost-reflective tariffs which will allow the power sector to be properly funded and functional.