Discos Reject Lagos Plan to Eliminate Tariff Classifications

The Lagos State Government's proposal to abolish electricity tariff classifications has faced rejection from electricity distribution companies (Discos), who argue that such a move could lead to consumer unrest and exacerbate market distortions. The Discos expressed concerns that implementing this plan prematurely, without first enhancing electricity supply, would create significant challenges, particularly in areas lacking adequate metering.

Biodun Ogunleye, the Lagos State Commissioner for Energy and Mineral Resources, stated that the government aims to ensure stable power supply across the state by eliminating the current band structure, which is set to be introduced by the Nigerian Electricity Regulatory Commission (NERC) in April 2024. The Discos emphasized that the current band structure compels them to improve supply, and removing classifications without sufficient generation capacity would result in consumers facing higher costs, potentially leading to protests.

They warned that the elimination of subsidies and the introduction of full cost-reflective tariffs could provoke crises in underserved communities.