Discos Owe NBET N430bn In 11 Months
Power distribution companies (Discos) failed to pay a total of N429.87bn to the Nigerian Bulk Electricity Trading Plc for electricity sold to them from January to November last year.
The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells through vesting contracts to the Discos, which then supply it to the consumers.
The bulk trader noted that some of the Discos had yet to meet up with the approved minimum remittance.
The Discos were given a total invoice of N572.17bn for the energy received in the 11-month period but only paid N142.31bn to NBET, data obtained from the bulk trader on Wednesday by our correspondent showed.
The 11 power distributors received a total invoice of N55.78bn in January; N51bn in February; N54.53bn in March; N51.64bn in April; N53.96bn in May; N47.58bn in June; N51.68bn in July, and N53.01bn in August.
The Discos received a total invoice of N49.39bn in September; N50.1bn in October and N53.5bn in November.
But they paid N12.48bn in January; N10.07bn in February; N13.17bn in March (including N4.18bn February late payment); N12.28bn in April; N14.67bn in May (including N2.56bn April late payment); N8.39bn in June; N11.05bn in July, and N14.93bn in August (including N2.63bn July late payment).
The Discos paid NBET N15.55bn in September; N15.87bn in October, and N13.85bn in November.
Kaduna Electric, which covers Kaduna, Kebbi, Sokoto and Zamfara states, did not make any remittance in February, March, April, June and August.
Port Harcourt Electricity Distribution Company did not make any payment to NBET in February, March and April; neither did Kano Electricity Distribution Company make any remittance in February, March and July.
The BEDC Electricity Plc failed to make any payment to NBET in March and July. Enugu Electricity Distribution Company made no remittance in April and July; Jos Electricity Distribution Company paid nothing in March and June.
Yola Electricity Distribution Company, which was returned to the Federal Government by the core investor in 2015, failed to make any payment in March.
The Nigerian Electricity Regulatory Commission, on January 3, 2020, released December 2019 Minor Review of Multi Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 for the 11 Discos.
NERC said the order was to establish the impact of the exogenous macroeconomic parameters and costs outside the control of the utilities in 2019 and projections for 2020.
It said the order had further prescribed minimum market remittance threshold payable by the 11 Discos and the projected tariff path until 2021.
The regulator said the Federal Government had, in the interim, committed to funding the revenue gap arising from the difference between cost-reflective tariffs determined by the commission and the actual end-user tariffs payable by customers.
It said all the Discos “are obligated to settle their market invoices in full as adjusted and netted off by applicable tariff shortfall.”
The commission, in its latest quarterly report, said the financial viability of the Nigerian electricity supply industry remained a major challenge threatening its sustainability.
It said, “The liquidity challenge is 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 severity of the liquidity challenge in the Nigerian electricity supply industry was reflected in the less than 50 per cent settlement rate of the energy invoice issued by the Nigerian Bulk Electricity Trading Plc and Market Operator to each of the Discos as well as the non-payment by the special and international customers.”