A total of N325.54 bn was not remitted by the Power distribution companies (Discos) in the country to the Nigerian Bulk Electricity Trading Plc. for the electricity sold to them from January to October last year.
The government-owned NBET purchases electricity in bulk by means of generation companies through Power Purchase Agreements and sells through vesting contracts to the Discos, which then deliver it to the consumers.
The power distribution companies were given billings of N459.67 bn in the 10-month period but only paid N134.13 bn, which left a balance of N325.54bn.
Seven power distribution companies, namely Benin, Eko, Ibadan, Ikeja, Kaduna, Kano and Port Harcourt Discos, did not make any remittance in January, to NBET.
The Nigerian Electricity Regulatory Commission said in its latest quarterly report that while the low remittance by the Discos to NBET and the Market Operator was partly as a result of tariff shortfall, the Discos must strengthen on their commercial and technical efficiencies for progress on the payment commitment to the market, thereby improving sector liquidity.
” A major initiative towards improving revenue collection in the electricity industry is the provision of meters to all registered end-use consumers of electricity,” it added.
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According to the report, the challenge of sparse remittance has remained a serious interest to the commission as it is among the main causes of the liquidity crisis facing the Nigerian electricity supply industry.
It said, “Low remittance adversely affects the ability of NBET to honour its obligations to Gencos while service providers (Transmission Service Provider, MO and NERC) struggle with the paucity of funds impacting their capacity to perform their statutory obligations.
” To address the poor remittance by Discos, the commission has commenced enforcement actions against Discos found to have engaged in unacceptably low remittances to NBET and the MO, factoring in all the parameters embedded in the tariff model.
” In this regard, the commission is finalising a framework which ensures transparency and equity in the disbursement of market funds for the benefit of all participants in the industry.”