The Nigerian Electricity Regulatory Commission (NERC) has reaffirmed its commitment to maintaining a fair balance between investors’ returns and consumer protection through the constant review of the Multi-Year Tariff Order (MYTO).
MYTO is the pricing framework that guides electricity tariffs in 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 MYTO framework was designed to ensure that investors in the electricity value chain recover their costs and earn reasonable returns without imposing undue burdens on consumers.
“There’s constant revision of the MYTO to assure investors that they can earn enough to cover the cost of their investments while at the same time also earning a reasonable rate of return that doesn’t become very onerous on consumers,” Yadudu said.
He likened the MYTO framework to a business planning tool, explaining that just as a prospective transport operator must know fare prices to project earnings before buying a car, power investors rely on MYTO for investment and recovery forecasts.
According to him, the framework provides a transparent and predictable pricing structure that assures investors of sustainability and stability while allowing consumers to pay fair rates for electricity.
Yadudu also highlighted that the Commission has integrated renewable energy considerations into the tariff framework, mandating electricity distribution companies (DisCos) to source at least 5 per cent of their energy allocation from renewable sources.
This, he said, would enhance supply reliability, reduce grid dependence, and promote efficiency.
Also speaking, the Senior Manager, Economic Regulation Division, Mr Onu Agbonuka, said the MYTO serves as the central pricing mechanism that sustains liquidity across the electricity value chain.
“Once pricing is not done properly, revenue becomes low, the business becomes unbankable, and investors lose confidence,” he explained.
Agbonuka noted that MYTO also supports key sectoral needs such as metering by ensuring that tariff structures allocate adequate resources to fund meter deployment and eliminate estimated billing.
On her part, the Deputy Manager, Economic Regulation Division, Mrs Blessing Kaigama, said the MYTO framework is pivotal to Nigeria’s gradual transition from the current single-buyer market, where the Nigerian Bulk Electricity Trading Company (NBET) purchases power from generation companies and sells to DisCos, to a direct contracting model between generators and distributors.
She stated that MYTO remains the safeguard ensuring fair pricing, investment recovery, and consumer protection under any market arrangement.
“The consumer may not even be aware of the transition because MYTO ensures that the framework covers generation, distribution, and delivery costs transparently,” Kaigama said.
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