The Nigerian Electricity Regulatory Commission (NERC) has reiterated its commitment to balancing investors’ returns with consumer protection through the constant review of the Multi-Year Tariff Order (MYTO).
This framework guides electricity tariffs in the country, ensuring that investors recover their costs and earn reasonable returns without imposing undue burdens on consumers.
Dr. Muhammad Yadudu, Principal Manager, Economic Regulation Division, who spoke on Electricity Town Hall, a radio programme, explained that the MYTO framework provides a transparent and predictable pricing structure that assures investors of sustainability and stability while allowing consumers to pay fair rates for electricity.
Dr. Yadudu likened the MYTO framework to a business planning tool, saying that just as a prospective transport operator must know fare prices to project earnings before buying a car, power investors rely on MYTO for investment and recovery forecasts.
The Commission has also integrated renewable energy considerations into the tariff framework, mandating electricity distribution companies to source at least 5% of their energy allocation from renewable sources.
This aims to enhance supply reliability, reduce grid dependence, and promote efficiency.
Senior Manager, Economic Regulation Division, Onu Agbonuka, noted that MYTO serves as the central pricing mechanism that sustains liquidity across the electricity value chain. He emphasized that proper pricing is essential to ensure revenue generation, making the business bankable and attractive to investors.
The MYTO framework is also pivotal to Nigeria’s gradual transition from the current single-buyer market to a direct contracting model between generators and distributors. It ensures fair pricing, investment recovery, and consumer protection under any market arrangement, according to Deputy Manager, Economic Regulation Division, Blessing Kaigama.
Spark News Naija reports that the Commission’s commitment to reviewing and updating the MYTO framework ensures that investors can earn reasonable returns on their investments while consumers are protected from unfair pricing practices.