Jul 23, 2025 (Daily Trust/All Africa Global Media via COMTEX) --
The Association of Power Generation Companies (APGC) has rejected the reduction of electricity tariff for Band A customers by the Enugu Electricity Regulatory Commission (EERC).
A statement by the Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, said the tariff review does not bode well for the sector as the EERC made the review with the view of the federal government paying the outstanding balance it reduced.
It would be recalled that the EERC had on Sunday announced the reduction of Band A tariff in the state from N209/kWh to N160/kWh, effective August 1, 2025, while keeping tariffs for Bands B, C, D, and E frozen.
The commission issued a new tariff order to MainPower Electricity Distribution Limited, reducing the electricity cost for Band A customers.
According to EERC Chairman, Chijioke Okonkwo, the reduction in tariff became imperative following the commission's review of MainPower's tariff and licence applications as the new subsidiary of the Enugu Electricity Distribution Company operating in Enugu State.
"We reviewed their entire costs, using our Tariff Methodology Regulations 2024, and the supporting Distribution Tariff Model to get an average price of N94. The price is low because the Federal Government has been subsidising electricity generation cost, which charges only N45 out of the actual cost of N112.
"That was how we came about the average tariff of N94 as a cost-reflective tariff at our level as a subnational electricity market.
But Ogaji said the methodology is wrong and dangerous as the tariff order made it imperative to provide some clarification on the news that the Federal Government had provided a subsidy for electricity.
She stated that there is no government policy on subsidies but debt accumulation, wondering why the Enugu state government is placing more burden on the GenCos, who bear the brunt of unpaid subsidies.
"It is imperative to state that there is no FGN policy on subsidies. It is a debt accumulation," she stated.
Ogaji warned that the N45 per kWh being covered leaves a 60 per cent cost gap that EERC assumed would be filled by the Federal Government, despite no official or cash-backed subsidies in place.
"This tariff issued by EERC has set a precedent for all other States. From their tariff order, only N45 is captured for generation cost out of N112. This portends a bigger issue in the decentralisation of power or electricity to the states.
"There are many burning questions about dealing with obligations and liabilities (all legacy debts post privatisation but before the exit to state independence) in the decentralisation discourse."
COMTEX_467507610/2029/2025-07-23T11:06:34
by Faruk Shuaibu
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