The MYTO Minor Review Order 2019 – The Awaited Relief or a Nostrum?

One of the principal objectives of the Nigerian Electricity Regulatory Commission (NERC), as stipulated in the Electric Power Sector Reform Act 2005 (EPSRA), is to ensure that the prices charged by licensees are fair to consumers, are sufficient to allow the licensees to finance their activities and allow for reasonable earnings for efficient operation.

EPSRA further subjects the applicable tariffs for distribution activities to regulation and provides that the regulation shall be according to one or more methodologies adopted by NERC. Pursuant to these powers, NERC in 2015, issued the Multi-Year Tariff Order 2015 (MYTO 2015), applicable for the period commencing January 2015 to December 2024, with the objective of ensuring that the applicable tariffs for distribution activities are cost-reflective, in accordance with the aforementioned provisions of EPSRA.

MYTO 2015 mandates NERC to carry out a biannual minor review of the applicable tariffs, following which NERC is expected to vary the tariffs, where there has been a material change in certain specified economic indices.

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