The Managing Director of Niger Delta Power Holding Company, Mr. Joseph Ugbo, has thrown his weight behind the calls by generating companies for a hike in electricity tariff in the country.
Ugbo made his position known in an interview with journalists when the Acting President, Yemi Osinbajo, visited the N-Power Response Centre located in the NDPHC building in Abuja on Friday.
He said one of the challenges before the firms was moving from social service era of the defunct Nigerian Electric Power Authority and the Power Holding Company of Nigeria to the current era of market commodity.
In a market commodity, the NDPHC boss said the cost must reflect market production and return on investment made.
This, he said, was the reason behind the clamour for tariff increase.
He said, “So if there is a gap between the tariff and the cost, somebody has to pay for it. So are they going to be the rate payers or the tax payers through government revenue?
“The question is ‘does government have the money to pay that?’ We all know the situation we are in now, we all know that the cost of our main stay, oil, is going down. I think we have to be realistic about that.
“But I have seen certain consumers talk about ‘we are ready to pay but we want to see the power.’ So it is the chicken and egg situation. If you don’t pay they are not going to get the needed money to make the investment to give you the power.
“But if you look back, a lot of homes, businesses in Abuja and Lagos pay more than N70 per kilowatt hour. What you pay now is less than N30 per kilowatt hour and the grid provider is saying he wants you to increase marginally, is not going to be N70 per kilowatt hour.
“So, at the end of the day when you compare, it is still going to be less expensive than your self-generating power. The average cost of generating power is about N70 per kilowatt hour.
“So if somebody is offering to give you this power but you have to pay more, not the N70 per kilowatt hour, I think in my view the rate payers have to seriously consider it. Rate making is essentially the function of the regulator.
“This is my view note that I am not speaking for the regulator. I am just giving you my opinion as an industrial stakeholder.”