11 Discos, international electricity customers owe N97.5bn debt, says  NERC

The Nigerian Electricity Regulatory Commission (NERC) said the 11 Electricity Distribution Companies in Nigeria and four international customers including Paras SBEE, Transcorp SBEE, Mainstream NIGELEC and Odu-Pani-CEE failed to remit N97.5 billion debt issued to them by Market Operators in the fourth quarter of 2023.

The Commission disclosed this in its latest fourth-quarter report.

According to the data obtained from the Commission’s 2023 fourth-quarter report, the 11 DisCos held unto N81 billion while four international customers (Paras SBEE, Transcorp SBEE, Mainstream NIGELEC and Odu-Pani-CEET ), did not remit $12m (N16.5 when converted using N1,367 per dollar exchange rate) invoice issued to them by the MO for services rendered in Q4 2023.

Further breakdown of the debt by the DisCos, showed that in 2023/Q4, 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, DisCos collectively remitted a total sum of N188.7 billion (N156 billion for NBET and N32.5bn for MO), with an outstanding balance of about N81 billion. This translates to a remittance performance of about 70 percent in 2023/Q4 less than the 76 percent (remittance of N158 billion out of the total invoice of N208.7 billion) recorded in 2023/Q3.

Meanwhile, the total revenue collected by all DisCos in 2023/Q4 was M294.9bn out of the N399.7bn that was billed to customers.

This translates to a collection efficiency of 74 per cent.

The 74 per cent collection efficiency recorded in 2023/Q4 is less than the 76 percent recorded in the previous quarter.

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 $12.02m issued by the MO for services rendered in 2023/Q4.

The report, however, noted that some international customers made payments during 2023/Q4 for outstanding MO invoices from previous quarters.

It also said that there were no remittances by bilateral customers against the cumulative invoice of N1.9m issued to them by the MO for services rendered in 2023/Q4.

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 N0.72bn (NBET) and N0.07 billion (MO) invoices received in 2023/Q4.

The development comes amid the continuing Electricity sector crisis in Nigeria.

In more than a decade, Nigeria’s power sector has struggled to generate between 2000 megawatts and 5,000mw for a population estimated to be above N200 million.

In the first three of 2024, Nigeria’s power supply dropped drastically leading to epileptic electricity supply.

Others in the last month, the power generation increased to N5,000mw as the Minister of Power, Adebayo Adelabu promised to hit 6000mw by December 2024.

Recall that on April 3, 240 per cent electricity tariff hike for customers getting at least 20 hours of power supply. One justification the Nigerian government gave for the tariff hike was that it would help reduce legacy debt and tackle liquidity issues in the power sector.

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