NERC Pledges Fair Electricity Tariffs, Protects Investors’ Returns

The Nigerian Electricity Regulatory Commission (NERC) has reaffirmed its commitment to ensuring fair electricity pricing while safeguarding investors’ returns through continuous review of the Multi-Year Tariff Order (MYTO).

MYTO serves as the regulatory pricing framework guiding electricity tariffs across the country.

Speaking on Electricity Town Hall, a radio programme sponsored by the Commission, NERC’s Principal Manager, Economic Regulation Division, Dr Muhammad Yadudu, explained that the framework is designed to enable investors in the electricity sector recover costs and earn reasonable returns without imposing excessive burdens on consumers.

“There’s a constant revision of MYTO to assure investors they can cover their investment costs and earn a reasonable rate of return while ensuring electricity remains affordable for consumers,” Dr Yadudu said.

He likened the MYTO framework to a business planning tool, noting that just as transport operators need fare projections before purchasing vehicles, electricity investors rely on MYTO for accurate investment and recovery forecasts.

The framework, he added, provides transparent and predictable pricing, promoting stability for investors and fair rates for consumers.

Dr Yadudu also highlighted that the Commission has integrated renewable energy considerations into the tariff, requiring distribution companies (DisCos) to source at least 5 per cent of their energy from renewable sources to improve supply reliability, reduce dependence on the national grid, and enhance efficiency.

Supporting the remarks, Senior Manager, Economic Regulation Division, Mr Onu Agbonuka, said MYTO is crucial for sustaining liquidity across the electricity value chain.

“Improper pricing leads to low revenue, unbankable businesses, and loss of investor confidence,” he stated. Agbonuka added that MYTO also ensures adequate funding for metering projects, helping eliminate estimated billing.

Deputy Manager, Economic Regulation Division, Mrs Blessing Kaigama, noted that MYTO underpins Nigeria’s gradual shift from the current single-buyer market—where the Nigerian Bulk Electricity Trading Company (NBET) buys power from generators and sells to DisCos—to a direct contracting model between generators and distributors.

“The consumer may not even notice the transition because MYTO ensures generation, distribution, and delivery costs are transparently covered,” she said.

With these measures, NERC said it aims to strike a balance between investor confidence and consumer protection, ensuring that electricity remains both sustainable and affordable.