The new Chairman of the Nigerian Electricity Regulatory Commission, Abdullahi Ramat, has revealed that schools, hospitals and low-income Nigerians will benefit from a tariff relief package under the Electricity Act 2023.
This was as he made known his determination to implement the Power Consumer Assistance Fund as enshrined in the Electricity Act.
Ramat disclosed this in Kano when he received the Chief Medical Director of the Aminu Kano Teaching Hospital, Prof. Abdurrahman Sheshe, and the hospital’s management team on a congratulatory visit to his residence.
He explained that the Commission is set to roll out the Power Consumer Assistance Fund, which is designed to cushion the impact of rising electricity tariffs on vulnerable consumers and critical institutions.
PCAF is a special support fund created by law to help poor and vulnerable Nigerians pay for electricity.
The fund will also help critical institutions like schools and hospitals by cushioning the impact of high tariffs.
The fund, which will be managed by NERC, will come from the Federal Government through the National Assembly budget, while some categories of electricity users, especially bigger or richer customers, will also contribute a small amount.
NERC will be in charge of managing, keeping records, and deciding how the money is shared.
Section 122(1) of the Act states that “There is established the Power Consumer Assistance Fund (in this Act referred to as ‘PCAF’) to be used for the purposes specified.” Subsection (4) further clarifies that “The PCAF shall be used to subsidise underprivileged power consumers as specified by the Minister in consultation with the Commission.”
The law empowers NERC to determine who contributes to the fund and how much. Section 123(1) provides that “The Commission shall determine the contribution rates to be sent by designated consumers and classes of consumers and eligible customers to the PCAF and the subsidies to be disbursed from the PCAF, in accordance with policy directions issued by the Minister.”
Under Section 124, all consumers, including large “eligible customers”, will make contributions at rates fixed by NERC. While regular consumers will pay through their distribution companies, industries and other eligible customers will remit directly to the commission.
The Act comes with teeth. Section 126 warns that “Any person who fails to pay to the Commission or a distribution licensee, within the prescribed time, any amount owed under this Part, commits an offence and is liable to a fine not exceeding three times the amount owed.”
The new NERC boss, who is still awaiting National Assembly’s approval as of the time of filing this report, posted on his X handle that the PCAF would be rolled out.
“I received Prof. Abdurrahman Sheshe, the CMD, and the entire management of Aminu Kano Teaching Hospital on a congratulatory visit in my house here in Kano. We discussed how to ensure steady and affordable power for the hospital.
“I explained NERC’s plan to roll out the PCAF (Power Consumer Assistance Fund) under the Electricity Act 2023, which will cushion tariff impacts for schools, hospitals, and low-income consumers,” he stated.
The PUNCH reports that the previous plan to roll out the PCAF did not succeed.
While urging the hospital management to embrace cost-saving measures through energy audits, phasing out inefficient equipment and metering staff quarters and shops, Ramat said the commission would continue to engage the Kano Electricity Distribution Company to resolve disputes swiftly and ensure reliable supply.
“Our duty remains clear: to protect the rights of consumers while maintaining investor confidence by fostering an efficient, transparent market structure and investor-friendly ecosystem,” Ramat said.
He noted that the initiative aligns with government efforts to balance affordability with sustainability in the nation’s electricity market.
The Minister of Power, Adebayo Adelabu, promised in 2024 that the Federal Government would subsidise electricity in hospitals and universities by 50 per cent, but that has yet to materialise. Though Adelabu did not specify if this would be under the PCAF.
In his analysis, an expert in the sector, Adetayo Adegbemle, said he had been the lone voice promoting PCAR, stating that Ramat has chosen to do the right thing.
The convener of PowerUpNigeria, Adegbemle, maintained that as the sector teeters on the brink of liquidity crises, the Power Consumer Assistance Fund emerges as a critical solution, offering a structured alternative to subsidies while addressing the needs of diverse customer segments.
According to him, the government’s subsidies that freeze end-user tariffs below cost created a wide gap between cost-reflective tariffs and the rates charged to consumers, resulting in a massive monthly subsidy burden of approximately N262bn, as only 9.5 per cent of GenCos’ invoices were settled from the market, leading to cash flow shortages that caused gas suppliers to curtail supplies.
He added that NERC’s intervention in April 2024 brought temporary relief by unfreezing tariffs for Band A customers. However, resistance to further tariff adjustments and the government’s reluctance to revise rates for lower bands have stalled progress.
Adegbemle stressed that the PCAF offers a transformative approach to resolving NESI’s liquidity challenges.
“Unlike traditional subsidies, which blanket the entire sector, PCAF is designed to provide targeted financial support to electricity consumers while allowing the DisCos to charge cost-reflective tariffs.
“The fund will be financed through contributions from the government and eligible customers, with rates and durations determined by the Nigerian Electricity Regulatory Commission. NERC will oversee PCAF, ensuring transparent management and equitable distribution of benefits.
“Initially, all customers will receive support through PCAF, reducing the financial burden during macroeconomic volatility. As economic conditions stabilise, the fund will prioritise underprivileged customers, aligning with Section 122(4) of the Electricity Act,” he stated.
He suggested that PCAF should provide a minimum monthly subsidy of N5,000 per customer, equivalent to 25 kWh of electricity, saying low-income consumers using less than 25 kWh monthly will effectively enjoy a full subsidy, ensure affordability while promote efficient energy use.
“By enabling DisCos to charge cost-reflective tariffs, PCAF ensures they can cover operational costs and meet their financial obligations to GenCos. This eliminates the persistent cash flow issues that have plagued NESI, fostering a more resilient supply chain.
“Unlike blanket subsidies, PCAF focuses on delivering support where it is needed most. Low-income households, which typically consume minimal electricity, will benefit from full subsidies, ensuring they are not excluded from access to power,” he stated.
Adegbemle added that the scheme ought to have been implemented since the first quarter of 2025.
Other experts who spoke with The PUNCH expressed optimism over the scheme, stating, however, that accountability and identifying the poor consumers are important factors.
Earlier, Ramat, whose plan is to digitise the power sector, alluded to the fact that the challenges in the sector are enormous, as nearly 50 per cent of generated power is lost, leaving efficiency at barely half capacity.
This, he said, has discouraged investors and fuelled today’s liquidity crisis, despite 20 years of the reform and 12 years of the privatisation, while other privatised sectors like telecom thrive with liquidity and competition.
“The sector’s mixed ownership (private and government) makes digitisation fragmented; no single entity can compel another. But NERC, as the apex regulator, has the mandate to drive full digitisation across the value chain. By deploying IT, we can optimise operations, streamline processes, integrate payment and monitoring systems, stabilise the grid, enforce transparency, reduce losses such as TLF and ATC&C, and boost efficiency.
“Part of my plan includes developing an app available in both Android and iOS which will integrate the APIs of DISCOs and NISO to provide NERC with real-time visibility of payment channels and system operations,” he said in a post.
He promised to deploy a whistleblowing tool so that consumers can anonymously report electricity theft, meter bypass, and illegal connections.
“We will partner with the EFCC, borrowing a leaf from the successful naira mutilation campaign, to enforce arrests, apply name-and-shame measures, and carry out prosecutions, with penalties of up to three years’ imprisonment, as provided by section 208 of the Electricity Act 2023. This approach will not only curb electricity theft but also help reduce tariffs, since part of these losses are factored into consumer bills through MYTO.
“Honest customers should not continue paying for the crimes of electricity thieves. Ending electricity theft and vandalism is a journey we must all travel together.
“I firmly believe that with digitisation, we can tackle the sector’s challenges head-on: reducing losses, boosting efficiency, restoring investor confidence, protecting consumers, attracting competition, increasing liquidity, and ultimately lowering tariffs. This is not theory, it is achievable. And as Chairman/CEO of NERC, it is a promise,” Ramat said.
Crime23 hours ago
News23 hours ago
Crime8 hours ago
Lifestyle23 hours ago
News23 hours ago
News23 hours ago
Politics22 hours ago
News22 hours ago