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PHCN New Energy/Power Tariff not as it sounds

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With effect June 1, 2012, the Nigerian government through the power ministry and the Power Holding Company of Nigeria PHCN introduced new power tariff. The new power tariff structure hiked the cost per energy unit (KWH) for most Nigerians by over 50%. This means that the cost per energy unit for energy consumers in Nigeria went up from around N7 to around N12.

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If you think this is all you need to know about the new power tariff, then you will be in for a shocker the next time you go to pay your energy bills. The thing is that PHCN has left out a juicy part of the deal.

Mrs PHCN: what are your fixing?

I thought, I knew it all when I visited a PHCN office to pay my power bills recently. I had gone to pay my usual N1,000, which has been my ritual since February this year when power situation in Nigeria became even worse. I used to pay around N2,000, but with epileptic power supply I no longer see any need to tie down money I could use for something more important on an inefficient government monopoly. I am also lucky to have a prepayment meter.

Everything went as normal until I glanced on my payment receipt and saw Energy (KWH) : 35.10. Meaning that my N1,000 was able to buy only 35.10 energy units, which could last me for about 5 days. What the F***. Yes, I used the F-word at a PHCN office. Yes, I knew Naira has no value but I didn’t know it has become so worthless as to buy only 35.10 units of energy.

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There must be a mistake somewhere. The last time I bought energy with N1,000, I went home with 130.46 energy units. Yes, I knew of the power hike, but I had a target that N1,000 should be able to buy me at least 70 units of energy, which could last me 2 weeks if the current poor state of affairs continues.

When I protested about it to the female cashier at the PHCN office, she drew my attention to the juicy part of the new so called MYTO tariff. The one you probably do not know about yet. The one that most energy consumers will probably not know about until they visit a PHCN office. And what is this juicy part of the deal? Well, there is a N500 monthly fixed charge.

That means that when I gave the cashier N1,000. N500 fixed charge was deducted first. So, I effectively paid only N500. When I asked what the fixed charge is all about I was told to ask the minister and his team. So, mister minster over to you, what is the fixed charge all about? I know you guys read this blog, since I was some of my articles on your website.

PHCN is economical with the truth

So, far in the media campaigns about the new power tariff no mention is being made of the fixed charge. Most of the campaigns have focused on how the poor will now pay lower energy cost and the removal of the meter maintenance charge. No mention of how a monthly fixed charge is being brought in from the back door. Could there be a reason this?

Could it be that the power minister and PHCN officials cannot look Nigerians in the face and tell them that after paying an over 50% increase in energy cost without any commensurate increase in supply, they will have to pay an extra N500 on a fixed monthly charge?

With this new development, I have estimated that the PHCN component of my energy bill will now hover around N2,000 and N2,500 monthly that is if the current poor state of power supply continues. However, while that happens my cost of running my power generator is likely to remain the same if not increase.

So, far this week I have burnt N2,500 on fuel (home & business), this is actually because I was out of town for about three days.

The increment will probably enable PHCN increase and maintain their revenue levels, while the rest of us suffer. Is it not puzzling that while energy supply is dropping, PHCN is actually announcing revenue increase. All they need do is increase tariff and their revenue will increase without any appreciable increase in output.

This is supposed to be illegal. PHCN is abusing its monopoly position in the market to set unrealistic prices for their services. The national assembly must look into this issue especially the suspicious fixed energy charge. The PHCN must be told that the only justifiable way to grow a business is to increase productivity not price hike.

It may work in a monopoly, but is bound to fail in the long run. Ask your cousin NITEL.

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Paschal Okafor is NaijaTechGuide Team Lead. The article PHCN New Energy/Power Tariff not as it sounds was written by Paschal Okafor. The article was last modified: April 24th, 2016

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