Discos’ Collection Efficiency Falls Despite Tariff Hike
The collection efficiency of power distribution companies witnessed a drop in the first quarter of the year despite an increase in the total billing to electricity consumers by the power firms.
In the first quarter, the electricity bill to customers by the 11 power distributors rose to N182.8bn, but the Discos only recorded an aggregate collection of N116.9bn, representing 64.1 per cent collection efficiency.
This indicated a drop when compared to their performance in the fourth quarter of 2018, as it was gathered that in Q4 of 2018, the power firms billed customers a total of N172.5bn and collected the sum of N117.5bn, representing 68.1 per cent collection efficiency.
An analysis of their performances in the fourth quarter of 2018 and the first quarter of this year, based on data obtained from the Nigerian Electricity Regulatory Commission on Sunday in Abuja, also showed that the remittances of the Discos to the power market dropped in Q1 2019.
In its 2019 first quarter report, NERC stated that the financial viability of the Nigeria Electricity Supply Industry was still the most significant challenge threatening the sustainability of the power sector.
It noted that as reported in the preceding quarterly reports, the liquidity challenge was partly due to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft, and consumers’ apathy to payments under the widely prevailing practice of estimated billing.
The regulator said, “The total billing to electricity consumers by the 11 Discos rose to N182.8bn in the first quarter of 2019 but only an aggregate collection of N116.9bn, representing 64.1 per cent collection efficiency was achieved, a 4.1 percentage points decrease from the last quarter of 2018.
“The level of collection efficiency during the quarter under review indicates that a sum of N3.6 out of every N10 worth of energy sold during the first quarter of 2019 remains uncollected as and when due.”
The commission explained that the severity of the liquidity challenge in NESI was further reflected in the settlement rate of energy invoices issued by the Nigerian Bulk Electricity Trading Company and the Market Operator to Discos, as well as the payment by special and international customers.
It said, “During the first quarter of 2019, the 11 Discos were issued a total invoice of N190.1bn for energy received from NBET and for service charge by the MO, but only a sum of N52.8bn (approximately 28 per cent) of the total invoice was settled, indicating a significant deficit of N137.3bn.
“Whereas the collection efficiency ranges from 40 per cent (Kaduna Disco) to 84 per cent (Ikeja Disco), remittance performance ranges from 10 per cent (Jos Disco) to 43 per cent (Ikeja Disco).”