Discos failed to remit N510.53bn last year, says NERC

By Chetachi Onyia

Power distribution companies in the country failed to pay a total sum of N510.53 billion for the electricity sold to them in 2020 by the Nigerian Bulk Electricity Trading Plc.

The facts were disclosed by the Nigerian Electricity Regulatory Commission.

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 11 Discos were given a total invoice of N730.71 billion for the energy received in 2020, but they paid only N220.18 billion to NBET, according to the NERC.

“The power distributors received a total invoice of N52.13bn in January; N52.01bn in February; N52.62bn in March; N68.08bn in April; N68.09bn in May; and N56.27bn in June.

“The Discos received a total invoice of N66.33bn in July; N63.62bn in August; N59.10bn in September; N62.95bn in October; N62bn in November; and N67.50bn in December.

“But they paid only N14.96bn in January; N13.18bn in February; N6.07bn in March; N10.67bn in April; N12.84bn in May; and N12.91bn in June.

“They paid N12.91bn in June; N12.91bn in July; N14.99bn in August; N37.57bn in September; N22.47bn in October; N33.27bn in November, and N28.33bn in December,” NERC disclosed in its quarterly report.

The report noted that the financial viability of the Nigerian electricity supply industry had remained a major challenge threatening sustainability.

“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,” it said.

It said the period of the lockdown introduced by the Federal Government as a measure to curtail the spread of COVID-19 pandemic in 2020 further affected Discos’ billing of post-paid customers.

“The severity of the liquidity challenge in NESI was reflected in the settlement rates of the service charges and energy invoices issued by Market Operator and NBET respectively to each of the Discos as well as the non- and low payment by the special and international customers respectively for the services rendered by the MO,” the regulator said.

According to the report, the Discos were expected to make a market remittance of 44.87 per cent during the second quarter of 2020 but only 28.05 per cent settlement rate was achieved within the timeframe provided for market settlement in the Market Rules.

An 9nline medium had Minday reported that electricity consumers paid a total of N542.73bn to the Discos last year, out of a total bill of N816.15bn.

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