NERC increases electricity tariff

Published

9 years ago

December 25, 2014

An amended ‘special’ Multi Year Tariff Order to be known as MYTO 2.1 officially took off Wednesday. Essentially, from yesterday, electricity tariff went up.

However, because service delivery has not improved significantly, the Nigerian Electricity Regulatory Commission (NERC) has announced that distribution companies will not increase tariff for R1 and R2 (residential) consumers for six months. Other categories of customers would, however, witness an increase in what they pay for electricity.

Chairman of NERC, Sam Amadi, told some journalists in Abuja Wednesday that the increase is premised on the verified losses that the DISCOs were facing and the new price of gas, which took off this month.

Amadi said: “The implication of the increase in losses level is that the tariff will go up because the cost of distributing power will increase.

“Each of the distribution companies will, however, design a tariff on how to recover their revenue because what NERC has done is to insist that they will not increase tariff for R2 customers for six (6) months.”

He further explained: “Essentially from today (yesterday), the tariff should be up but what is happening now is that they are going to lose money for the next six months because of that caveat.

“We have taken a regulatory policy to say that they will not increase the tariff of residential consumers for the next six months until there is an improvement in service delivery and this is bitter for them because they will not recover that money for that six months but they have accepted it, finally, as a sacrifice they have to make.

“The bottom-line is that tariff should have increased for everybody from January 1, 2015 going by the increase in the cost of doing business; increase in gas price, new loss levels but because of the commitment that NERC has made to ensure that consumers are not exposed further to increased cost until there is some improvement, we have frozen the increment for six months for residential consumer but they will administer their tariff to other consumers but the residential consumers are given special consideration.”

He noted: “There has been an ongoing long-running review of the MYTO. Basically, the tariff is reviewed every six months in what we call minor review. The minor review however coincided with a special review which is based on the fact that when the new owners took over, there was an agreement that there will be a review of the ATC & C (Aggregate Technical, Commercial and Collection) losses, which is simply to say that the new owners bought their assets with an understanding with the BPE (Bureau for Public Enterprises) and which NERC recognised that when they come, they will have an opportunity to validate the losses level which the BPE projected and upon which they bought the assets.

“The implication is that when they did the review and together with NERC it will be verified and use the loss level to get for them a much more reflective tariff because tariff is based on many factors which one of them is loss.”

He added: “So, if we had projected that the loss level in the industry is 30 per cent, it means that 30 per cent of revenue in the industry will be lost but if suddenly it becomes 50 per cent, the implication is that we have underpriced the losses and therefore the tariff will be reviewed.

“When we were privatising, there was some lack of credibility with the data that was put forward and the agreement was that there was no need to argue and that when they come in, they conduct independent study of the loss levels and verify with NERC who will put it back through a special tariff review if the study is ascertained to be credible. That is why it a special review and not our normal six months review because this is based on one of the recognition of the agreement that they have to confirm that losses are as we projected. The commission has now accepted those losses level and it is now to put it into the tariff.

‘‘The new tariff that is announced is a review of the MYTO to factor the losses that are now different based on verification and studies, factor the new price of gas which has changed; basically, those are the two major components for now.

“We approved an amended MYTO tariff which means that issued a new tariff order that continues with the framework of the tariff but now shows that for the remaining of the five years period, the figures are now different but we have not factored some changes like exchange rates and inflation.”

NERC said, however, that the new tariff had an implication for take-off date for a disciplined electricity market by January 1, 2015.

A separate statement announcing the tariff in Abuja NERC explained that with the commencement of MYTO 2.1, the Commission would now progressively hold electricity distribution, transmission, generation companies as well as other market operators to the terms and conditions of their licences.

Amadi said: “It is expected that the take-off of MYTO 2.1 will bring about improved service delivery as distribution companies are now expected to implement their investment plans for metering and strengthen their networks in line with their bid documents.” – Guardian

WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

Published

4 years ago

April 13, 2019

Maritime First

…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development.

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity.

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years.

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further.

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA.

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers.

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being.

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained.

Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

Published

5 years ago

March 7, 2019

Maritime First

The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

Wind Farm Vessel Collision Leaves 15 Injured

Published

5 years ago

February 20, 2019

Maritime First

…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg.

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt.

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital.

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News