The Implications of Uniform Tariffs for Band A Customers Across Discos in Nigeria

April 2024 marked a significant regulatory shift as the Nigerian Electricity Regulatory Commission (NERC) approved uniform tariffs for Band A customers across all Distribution Companies (Discos). This decision deviates from the established Multi-Year Tariff Order (MYTO) methodology and has sparked widespread debate due to its implications on cost reflectivity and efficiency.

Nigeria's electricity market faces numerous challenges, including inadequate infrastructure, high technical and commercial losses, and a complex regulatory environment. Discos, operating under diverse conditions with varying operational efficiencies, customer bases, and geographical challenges, require a tariff structure that accurately reflects their costs to ensure financial sustainability and attract investment.

Our latest report delves into NERC's decision, examining its potential benefits and challenges. We draw comparisons with international practices to provide a comprehensive analysis and offer recommendations to address the identified issues.