Nightclubs could not remit N208bn in 2022, says FG

Power distribution companies failed to send a total of N208.8bn to Nigeria’s electricity supply industry in 2022, the federal government has said.

Figures obtained on Sunday from the latest report for the fourth quarter of 2022 from the Nigerian Electricity Regulatory Commission, a federal government agency, as well as those for the first, second and third quarters showed that the Discos never made full shipments during the entire period. .

There are around 11 power distribution companies in Nigeria responsible for distributing electricity to consumers in their respective franchised areas of operation. They include Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt and Yola Discos.

The Discs were created in 2013 as part of Nigeria’s electricity sector reforms aimed at improving the efficiency and reliability of electricity supply across the country.

Companies collect electricity bills from consumers on behalf of the electricity market. They remit to the power market through Nigerian Bulk Electricity Trading Plc and Market Operator, an arm of the Federal Government-owned Nigerian Transmission Company.

But figures obtained from the electricity sector regulator showed that the Discos did not remit N49.23bn, N31.3bn, N58.3bn and N69.94bn in the fourth, third, second and first quarter of 2022, respectively, making a total of N208. .8bn.

Commenting on market remittances, in its Q4 report, the NERC said: “Combined invoices issued to Discos in 2022/Q4 were N231.01bn consisting of: i) Nigerian Bulk company generation costs Electricity Trading: N188.74bn; ii) transmission and administration services of the Market Operator: N42.27bn.”

“Of this amount, the Discs collectively remitted a total sum of ₦181.78 billion (₦145.91 billion for NBET and ₦35.87 billion for MO) with an outstanding balance of ₦49.23 billion” .

The commission affirmed that the bad consignment of the Discs was a direct consequence of the fact that the electric companies registered Commercial and Average Technical Collection losses higher than those allowed.

The NERC also stated that the combined bills issued to the Discs in the third quarter of last year were ₦204.84bn, adding that this was split into NBET generation costs, ₦164.34bn; and MO transmission and administrative services, ₦40.50bn.

“Of this amount, the Discs collectively remitted a total sum of ₦173.550 million (₦140.670 million for NBET and ₦32.880 million for MO) with an outstanding balance of ₦31.290 million.”

In the Q2 energy market remittance, the NERC stated that the combined bills from NBET and MO to Discos in Q2 2022 were N185.01bn, divided into generation costs: N149.89bn, while the administrative and transmission services were put at N35.12bn.

“Of this amount, the Discos collectively remitted a total sum of N126.69bn (N102.35bn for NBET and N24.34bn for MO) with an outstanding balance of N58.32bn,” the report stated.

Similarly, data obtained by our correspondent from NERC’s Q1 2022 report on market remittances indicated that the combined bills from NBET and MO to Records in Q1 last year were N205.630 million, divided into generation costs: N164.860 million. ; while administrative and transmission services were N40.77bn.

“Of this amount, the Discs collectively remitted a total sum of N135.69bn (N109.96bn for NBET and N25.73bn for MO) with an outstanding balance of N69.94bn,” the commission stated.

Nigeria’s electricity sector is facing a liquidity crisis and one reason for this is the low remittances from power distribution companies to the electricity market since the industry’s privatization in November 2013.

The president of the Nigeria Consumer Protection Network and coordinator of Power Sector Perspectives, Kunle Olubiyo, urged the new government led by President Bola Tinubu to take a holistic look at the power sector.

He told our correspondent in a recent interview that the privatization of the successor generation and distribution companies to the defunct Power Holding Company of Nigeria in November 2013 should be reviewed.

This, he said, was particularly due to the dysfunctional output of power distributors since they were privatized, adding that the 10-year moratorium on privatizing the power sector would end this year.

Olubiyo said: “When this moratorium expires in October, naturally it will be without litigation because they have given the privatized companies 10 years. And so, if between the lines we try to change the goalpost, then a dispute can arise.

“If it weren’t for the activities of the banks that are now involved in the daily operation of some nightclubs, we would in no way have been able to bring out this last straw of impunity in the sector. People earn up to N15bn in a month and will still have a license for zero remittances.

“As consumers, are we not paying our energy bills? For the generating companies, don’t they pay for the gas? And someone will collect money on our behalf and not remit it. So this privatization system cannot work and has not worked since the sector was privatized 10 years ago”.

The Abuja-based electricity sector expert and former member of the Presidential Adhoc Committee on the Review of the Electricity Tariff in Nigeria, further called on the government to withdraw its 40 per cent stake in Discos and split the franchises of the 11 utility companies. distribution into smaller units. to break the current market monopoly and promote the ideals of a competitive electricity market.

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