By Adedapo Adesanya
The Nigerian Electricity Regulatory Commission (NERC) said it had communicated the need for the federal government to intervene over the longstanding trend of non-payment and debts by international customers, and others to the power sector.
According to a report, as of the quarter under review, electricity Distribution Companies (Discos) and four international customers serviced by the Market Operator (MO), did not remit a total of N97.5 billion to the power sector in the fourth quarter of 2023.
Statistics obtained from the Nigerian Electricity Regulatory Commission’s 2023 fourth-quarter report, said the 11 DisCos held unto N81 billion, while four international customers (Paras SBEE, Transcorp SBEE, Mainstream NIGELEC and Odu-Pani-CEET ), did not remit $12 million (N16.5 billion when converted using N1,367/$1 rate) invoice issued to them by the MO for services rendered in the third quarter of 2023
This puts total debt by the DisCos and international customers at N97.5 billion for the period under review.
A breakdown of the explanation of the debt by the DisCos showed that in Q4 2023, the cumulative upstream invoice payable by DisCos was approximately N270 billion, consisting of N223 billion for generation costs from the Nigerian Bulk Electricity Trading (NBET) company, and about N47 billion for transmission and administrative services by the MO.
However, out of this amount, the DisCos collectively remitted a total sum of N188.7 billion (N156 billion for NBET and N32.5 billion for MO), with an outstanding balance of about N81 billion.
This translates to a remittance performance of about 70 per cent in Q4 2023 compared to the 76 per cent (remittance of N158 billion out of the total invoice of N208.7 billion) recorded in Q3 2023
The total revenue collected by all DisCos in Q4 2023 was N294.9 billion out of the N399.7 billion that was billed to customers. This translates to a collection efficiency of 74 per cent.
In comparison, the total revenue collected by all DisCos in Q3 2023 was N268 billion, out of the N349 billion billed to customers which translated to a 76 per cent collection efficiency. The 74 per cent collection efficiency recorded in Q4 2023 is –2.77 per cent lower than the efficiency recorded in the preceding quarter (76 per cent).
The report further detailed that none of the four international customers being supplied by GenCos in the Nigerian Electricity Supply Industry (NESI), made payment against the cumulative invoice of $12.02 million issued by the MO for services rendered in Q4 2023.
The report, however, noted that some international customers made payments during Q4 2023 for outstanding MO invoices from previous quarters.
It also said that there were no remittances by bilateral customers against the cumulative invoice of N1.9 million issued to them by the MO for services rendered in Q4 2023.
The recurrent delay of remittances by international and bilateral customers, NERC said should prompt the MO “to invoke the provision of the market rules to curtail the payment indiscipline being exhibited by the various market participants”.
The special customer (Ajaokuta Steel Co. Ltd and the host community) did not also make any payment towards the N0.72 billion (NBET) and N0.07 billion (MO) invoices received in the last quarter of 2023.
“This continues a longstanding trend of non-payment by this customer and the Commission has communicated the need for intervention on this issue to the relevant FGN ministries,” NERC added.
The power sector debt continues to rise, as the country battles inadequate power supply as a result of low generation.
The GenCos currently generate about 5,000 megawatts (MW) despite the grid having a combined capacity of about 12,000 MW making the Transmission Company of Nigeria (TCN) transmit the same to the DisCos for onward distribution to end users.