Why We Increased Electricity Tariff – Aba Power
Aba Power Limited (APL), the electricity distribution company serving Aba and its environs in Abia State, has announced a tariff adjustment to sustain its operations amid increasing economic challenges. The company disclosed that the National Electricity Regulatory Commission (NERC) granted regulatory approval for the tariff hike on December 30, 2024, with implementation taking effect from January 1, 2025.
In a statement, Barr. Ugochukwu Opiegbe, the Managing Director of Aba Power Limited, emphasized that the adjustment was necessary due to inflation, rising foreign exchange rates, and increased operational costs. He also pointed out that while other electricity distribution companies (Discos) had raised their tariffs as early as April 2024, Aba Power had maintained the lowest tariff within its service area for over eight months before implementing the change.
Aba Power Electric Company is a fully privately owned and independent electricity distribution company. Unlike legacy Discos, we do not receive government subsidies or interventions. Our tariff is entirely cost-reflective and directly linked to the actual costs of power generation, distribution, and operations.
He further explained that the company had engaged customers in a three-day consultation before implementing the tariff adjustment.
Aba Power Managing Director highlighted the financial difficulties faced by the company due to the fluctuating foreign exchange rate and increasing cost of power procurement. The company has been importing power from the national grid due to unreliable gas supply, which has resulted in significant losses.
The wholesale tariff for power importation from Niger Delta Power Holding Company (NDPHC) since inception has reached N136/kWh, whereas our highest tariff to customers up to December 2024 was N117/kWh. This has led to a deficit, making it difficult to sustain operations,he said.
The depreciation of the naira, from N416 to N1,700 per dollar, has significantly increased operational costs, loan repayment obligations, and the cost of procuring spare parts from abroad.
Beyond economic factors, Aba Power is also grappling with vandalism and sabotage of its infrastructure, which has further strained its ability to deliver efficient power supply. The company called on the government and power consumers to support efforts in curbing these criminal activities.
On allegations of estimated billing, Opiegbe clarified that all customer billings are guided by NERC regulations using a capping method to ensure fairness.
Despite the tariff increase, Aba Power reassured its customers of its commitment to providing reliable electricity services. The company emphasized that it empathizes with consumers facing financial challenges and will continue working towards delivering affordable and sustainable power supply.
