Debt: NBET Owes Electricity Producers N364bn In 10 Months
Electricity generation companies are owed N364.11bn by the Nigerian Bulk Electricity Trading Plc for electricity generated, sold and fed into the national grid from January to October last year, latest data from the bulk trader showed on Thursday.
The government-owned NBET buys electricity in bulk from Gencos through Power Purchase Agreements and sells through vesting contracts to the distribution companies, which then supply it to the consumers.
The Gencos include the successor companies carved out of the defunct Power Holding Company of Nigeria, the Niger Delta Power Holding Company (which manages government-owned power plants built under the National Integrated Power Project scheme), and Independent Power Producers.
NBET received total invoices of N499.79bn from the Gencos for electricity delivered in the 10-month period but only paid N135.68bn to them.
The average energy sent out by the Gencos was 3,584.55 megawatts hour/hour in January; 3,820.37MWh/h in February; 3,904.65MWh/h in March; 3,867.53MWh/h in April; 3,597.26MWh/h in May; 3,128.87MWh/h in June; 3,182.18MWh/h in July; 3,519.55MWh/h in August; 3,382.76MWh/h in September, and 3,593.47MWh/h in October.
NBET paid the Gencos N6.08bn for January invoices of N48.23bn; N20.75bn out N48.27bn in February; N13.39bn out N52.50bn in March; N14.12bn out of N50.98bn in April; N15.09bn out of N49.62bn in May; and N13.83bn out of N47.64bn in June.
The bulk trader paid N15.08bn out of N51.79bn in July; N10.287bn out of N50.69bn in August; N14.977bn out of N47.79bn in September, and N12.075bn out of N52.279bn in October.
The Nigerian Electricity Regulatory Commission noted in its latest quarterly report that the challenge of poor remittance by Discos had remained a serious concern, describing it as one of the main causes of the liquidity crisis facing the Nigerian electricity supply industry.
It said, “Low remittance adversely affects the ability of NBET to honour its obligations to Gencos while service providers (Transmission Service Provider, Market Operator and NERC) struggle with the paucity of funds impacting their capacity to perform their statutory obligations.
“To address the poor remittance by Discos, the commission has commenced enforcement actions against Discos found to have engaged in unacceptably low remittances to NBET and the MO, factoring in all the parameters embedded in the tariff model.”
The Executive Secretary, Association of Power Generation Companies, the umbrella body for the Gencos, Dr Joy Ogaji, told our correspondent recently that the inability of NBET to make full payment to the Gencos had made it difficult for them to pay their gas suppliers.
“This has accounted for the sub-optimal growth, inefficient operation and the current dire situation of the Gencos, which has a huge negative impact on the entire power sector,” she said, adding that poor gas supply occasioned by the non-payment of invoices would drastically affect power supply in the country.
According to Ogaji, the terms of the PPA between the Gencos and NBET clearly provides for interest payment on invoices not paid within the period (45 days) stipulated by the PPA.
“Furthermore, it is a commercial aberration for a party in a commercial transaction, who is owed and denied the benefit of its money, not to be entitled to interest payment,” she added.