In the face of mounting fears over rising electricity costs, Nigerians are closely watching NERC ( The Nigerian Electricity Regulatory Commission ), the body charged with overseeing the industry, as it announced new guidelines for how and when electricity prices could change.
And while the process seemed to promise transparency, the question on everyone’s lips was: How much more would we have to pay?
The head of NERC, Sanusi Garba, explained that new rules, introduced under the 2023 Electricity Act, mandate that electricity companies cover their costs, maintain operations, and earn a fair return on investments.
NERC reviews and adjusts prices using the “Multi-Year Tariff Order” every five years.
One year before any significant change, NERC notifies companies and gives them 120 days to submit their requests, backed by financial records and proof of customer consultations.
Then, NERC conducts a thorough review, which can take up to 90 days.
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After publishing its findings, NERC allows 21 days for the public to comment before they make a final decision.
For smaller price adjustments, NERC considers factors such as fuel costs, inflation, exchange rates, and electricity generation levels.
The President’s energy advisor, Olu Verheijen, highlighted the government’s ongoing efforts to reform electricity subsidies.
Currently, the government spends over ₦200 billion monthly on subsidies, but the wealthiest 25% of Nigerians benefit the most.
To address this, the government works towards a more targeted system to ensure low-income households receive the most support, making electricity more affordable for millions.
Through these changes, NERC and the government aim to balance the needs of the energy sector with the reality of Nigeria’s economic challenges.
