The Legendary Multi-Year Tariff Order (MYTO) used in deriving the selling price of electricity on a yearly basis has been discarded by the Nigeria Electricity Regulatory Commission (NERC), in a bid to develop a better package for determining energy tariff. MYTO is used to set wholesale and retail prices for electricity by employing a unified way to determine total industry revenue requirement that is tied to measurable performance improvements and standards.
The commission claims that it is unclear if consumers are being cheated with the MYTO package, stating that it has set up a committee to evaluate the actual cost of producing a unit of energy in order to integrate it into the soon to be developed tariff package.
This was made known to pressmen by the NERC Chairman, Prof. James Momoh in Abuja, where he also noted that as a programmer he doesn’t believe in the Multi-Year Tariff Order.
He said: “Worldwide, it is not easy to calculate what it costs to produce one kilowatt of power. But we are not going to use somebody’s software that is passed on to us in NERC. They call it MYTO software. No. I am not going to believe that because I am a programmer. I develop programmes. I calculate things. I develop software packages in America for energies for the power sector.”
“So, I really want us to get into it and find out what it is, how did they calculate this pricing for us? So, perhaps there is an error. And that error we may find out because our staff here will find out how to do it and they will modify the calculation and come with a better way. The idea is to make sure that we are not being cheated as customers.”
Momoh said he has already raised a team to figure out what it costs to produce electricity and supply to the consumers.
“But here, there are first class people, whose job is to sit down quietly with me and unbundle the cost of one kilowatt of power, all the way from the gas supply to the GenCos through the transmission line to the DisCos to the customer’s end of it,” he said.
“So, we know how much really it costs to produce one kilowatt of power, including the operational cost, the processing, the end cost, plus the technical cost. When we say we are going to increase rates, it is not based on guesswork.”