In its cultural character Aba Power Raises Tariff but Stays True to Affordable Pricing
While most of Nigeria’s electricity distribution companies (DisCos) have implemented significant tariff hikes in recent months, Aba Power Limited has taken a more measured approach aimed at protecting consumers. The utility has adjusted its rates upwards for its maximum demand industrial customers, but the new tariffs of N114.66 to N117.10 per kilowatt hour (KWh) remain the lowest nationwide for that customer band.
Aba Power’s Managing Director, Ugo Opiegbe, confirmed the modest tariff revision nearly two months after the other 11 DisCos raised prices steeply to a band of N66 to N225/KWh before a presidential order capped it at N206.80/KWh. Importantly, the company’s non-maximum demand residential consumers will only see tariffs rise to N106.56/KWh, still immensely lower than prevailing national rates.
The utility’s measured pricing approach reflects the ethos of its founder and parent company – Geometric Power Group, established by former Power Minister Prof. Bart Nnaji. As Nigeria’s sole integrated independent electricity firm, Geometric has long prioritized affordability and reliability through its 188MW gas power plant powering the Aba industrial hub.
Opiegbe cited the headwinds facing Aba Power’s core industrial customers as the rationale for the tariff adjustment. However, consumer groups have commended the DisCo for retaining 2023 rates across 9 of the 17 local government areas it serves in Abia state, rather than exploiting recent regulatory approvals for unchecked price gouging.
Indeed, the Nigeria Electricity Consumers Association (ECAN) praised Aba Power as the only DisCo not benefiting from the trillions in subsidies paid to others since privatization in 2013. Analysts like former NEPA manager Cliff Eneh laud Geometric Power’s “self-sacrificing” commitment to affordable power despite challenging market conditions.
The DisCo’s principled pricing stance provides a refreshing counterpoint to the controversies around arbitrarily high tariff regimes implemented by its peers lately. While all DisCos grappled with rising operating costs necessitating some upward revisions, Aba Power’s surgical adjustments demonstrate a consumer-centric ethos.
For its industrial backbone, retaining competitive electricity pricing is crucial to sustaining operations and profitability. The new tariffs, while higher than before, could still grant firms in Aba’s manufacturing clusters a lifeline amid harsh economic headwinds.
Importantly, Aba Power appears determined to shield residential users from harsh tariff shocks through the modest N106.56/KWh rate for non-maximum demand customers. This could provide vital relief for households already battling inflation’s impacts on consumer spending.
Of course, the proof will be in the actual bills consumers receive in the coming months. Utilities have previously paid lip service to affordable pricing only to sting users with opaque tariff calculations. Aba Power will be closely watched to ensure the approved bands are transparently implemented.
However, its unique origins and profit motivations distinct from other privatized DisCos do engender more confidence in credible follow-through. As a commercially oriented private entity, retaining customer goodwill is crucial for sustainability.
For an industry historically notorious for inconsistent service and controversial billing practices, Aba Power seems intent on pioneering a more palatable consumer-friendly model. Its differential approach amid the latest tariff turmoil could enhance its reputation as the sector’s consumer champion.
Reference
Aba Power adjusts tariff, still remains lowest in the country published in Businessday