Nigeria’s NERC MYTO 2024: No Change to Electricity Tariff

The Multi-Year Tariff Order 2024 (MYTO or the Order), issued on 28th December 2023, establishes a new legal order in the Nigerian Electricity Supply Industry (NESI) tariff regime. The Nigerian Electricity Regulatory Commission (NERC) has, through this Order, approved an upward review of end-use tariffs in Nigeria. However, at this time, the Federal Government of Nigeria (FGN) will absorb the brunt of the increase, covering the difference between the actual tariffs consumers pay and the cost-reflective tariffs NERC approved, through an electricity subsidy.

Several issues arise from adopting MYTO 2024, some of which this newsletter considers. These issues include whether it is legally valid to avoid paying subsidies from the Power Consumer Assistance Fund (PCAF), the potential impact of reducing Aggregate Technical, Commercial & Collection (ATC&C) losses, the advantages and disadvantages of monthly reviews of the macroeconomic components in the tariff design, and the likely premature effects of transitioning DisCos not yet creditworthy to a bilateral contracting arrangement.

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