Discos’ Debt To NBET Rises To N173bn
Power distribution companies in the country failed to remit a total of N173.35bn to the Nigerian Bulk Electricity Trading Plc for the electricity sold to them in the first four months of this 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 reiterated that some of the Discos had yet to meet up with the approved minimum remittance.
The Discos were given a total invoice of N224.84bn for the energy received in the four-month period but only paid N51.49bn (22.90 per cent) to NBET, data obtained from the NBET on Wednesday by our correspondent showed.
The 11 power distributors received a total invoice of N52.13bn in January; N52.01bn in February; N52.62bn in March; and N68.08bn in April.
But they paid N14.96bn (29 per cent) in January; N13.04bn (25 per cent) in February; N6.07bn (12 per cent) in March; and N9.84bn (14 per cent) in April.
The PUNCH reported last week that NBET failed to pay the power stations on the national grid a total of N181.39bn from January to April this year.
According to NBET, the payment to the Gencos are based on receipts from the Discos.
Power distribution companies in the country saw their revenue collection rise a record N127bn in the first three months of the year.
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.”
NERC have often noted that the liquidity challenge in the sector 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 Association of Nigerian Electricity Distributors, the umbrella body for the Discos, said in its latest quarterly report that the Discos’ collection hit a new record of N127bn in the first quarter of this year but collection efficiency dropped below 70 per cent.
The power firms said the energy sent out in the first quarter of this year was much less than what was projected at the last minor review for 2020.
According to them, the Nigerian electricity supply industry has not solved critical issues such as the lack of spinning reserve, load misalignment with Discos and the Transmission Company of Nigeria interface issues, delays in the implementation of TCN’s expansion plan and lack of investment in Discos’ infrastructure.
ANED said, “The oft-bandied issue of load rejection by Discos seemingly seeks to hide all of the above issues.
“The Disco’s uncertainty on the energy to be received from the TCN has become a major threat and it will hurt the core of their performance improvement plans as many of them are based on the basis of the projections done by the Nigerian Electricity Regulatory Commission at June’s Minor Review 2019.”
