Distribution companies (DISCOS) also have their fair share of ‘net arrears’, not just customers alone. Latest data released by Market Operators (an arm of the Transmission Company of Nigeria) revealed that the distribution companies are failing in their remittance to market operator and has resulted to a debt of N165.21bn owed by the electricity distribution companies. The Market Operators administers the market rules of the Nigerian Electricity Supply Industry (NESI). It is responsible for the administration of the Electricity Market and promoting efficiency in the market.
The total debt electricity distribution companies owe operator of the Nigerian electricity market, otherwise known as market operator rose to N165.21bn as at November 2017. This data further shows a shortfall in terms of of stipulated remittances back to the market operators. This shortfall grew by N6.41bn between October and November last year.
This was contained in a report put together by the market operators and was presented at the recent power sector meeting in Abuja. The figures released showed an increase from the N158.8bn owed in October 2017, to the present N165.21bn in November 2017. Findings revealed that the distribution firms indebtedness to the market operators increases on a monthly basis since January 2015 when the commencement of the transitional electricity market was declared by the Federal Government.
Power distributors in their defense noted that customers failure in paying their bills, refusal to pay bills and meter bypass are the major reason for their poor remittance to the market. The Executive Director, Association of National Electricity Distributors, Sunday Oduntan expressed that the (aforementioned) challenges have made it difficult for the distribution to regroup their invested funds.
The Managing Director, Niger Delta Power Holding Company, Chiedu Ugbo, recently stated that power generation companies were not being paid adequately for the electricity they generated and supplied to the market. According to him, the inability of the Discos to make appropriate remittances to the market made the Federal Government to intervene in the sector through the provision of N701bn to support Gencos in paying for gas.
Ugbo also stated that the generation companies run by the NDPHC could only get about 30 per cent as payment for the power they supplied to the grid on a monthly basis.
He said, “There is a lot of shortfall and what we were receiving in the past after we generated power to the grid was about 30 per cent. In fact, the maximum we have ever received from the market is about 30 per cent of our invoice. That challenge is there. But the government, being responsive, came up with the N701bn intervention to ensure that at least we are able to pay for gas. This is because with 30 per cent, we were not paying and couldn’t have been able to pay gas suppliers, for in your invoice as a generation company, gas alone will take about 50 to 55 per cent.”
A further analysis of the report showed that four Discos remitted below 20 per cent to the market in November last year, while the highest remittance of 80 per cent was made by the Eko Distribution Company. The average performance of the 11 distribution companies in terms of their remittances during the month under review was 37 per cent.