The Nigerian Electricity Regulatory Commission (NERC) said it has communicated the need for the Federal Government to intervene over the longstanding trend of non-payment and debts by international customers, and others to the power sector.
This was contained in the 2023 fourth-quarter report.
According to the report, as of the quarter under review, electricity Distribution Companies also known as the DisCos, and four international customers serviced by the Market Operator, did not remit a total of N97.5bn to the power sector in the fourth quarter of 2023.
Statistics obtained from the Nigerian Electricity Regulatory Commission’s 2023 fourth quarter report, said the 11 DisCos held unto N81bn, 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/$1 rate) invoice issued to them by the MO for services rendered in 2023/Q4.
This puts total debt by the DisCos and international customers at N97.5bn for the period under review.
A breakdown of the explanation of the debt by the DisCos, showed that in 2023/Q4, the Numulative upstream invoice payable by DisCos was approximately N270bn, consisting of N223bn for generation costs from the Nigerian Bulk Electricity Trading (NBET) company, and about N47bn for transmission and administrative services by the MO.
However, out of this amount, the DisCos collectively remitted a total sum of N188.7bn (₦156bn for NBET and N32.5bn for MO), with an outstanding balance of about N81bn. This translates to a remittance performance of about 70 per cent in 2023/Q4 compared to the 76 per cent (remittance of N158bn out of the total invoice of N208.7bn) recorded in 2023/Q3.
The total revenue collected by all DisCos in 2023/Q4 was N294.9bn out of the N399.7bn that was billed to customers. This translates to a collection efficiency of 74 per cent. In comparison, the total revenue collected by all DisCos in 2023/Q3 was N268bn, out of the N349bn billed to customers which translated to a 76 per cent collection efficiency. The 74 per cent collection efficiency recorded in 2023/Q4 is –2.77per cent lower than the efficiency recorded in 2023/Q3 (76 per cent).
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 ₦1.9m 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 ₦0.72bn (NBET) and ₦0.07bn (MO) invoices received in 2023/Q4.
“This continues a longstanding trend of non-payment by this customer and the Commission has communicated the need for intervention on this issue to the relevant FGN ministries,” NERC added.
The power sector debt continues to rise, as the country battles inadequate power supply as a result of low generation.
The GenCos currently generate about 5000 megawatts (MW) despite the grid having a combined capacity of about 12,000 MW.
Experts have said Nigeria’s over 200 million populace requires at least 30, 000MW to attain sufficiency.
Despite even the meagre 5000MW power generation, the Transmission Company of Nigeria (TCN), has struggled to transmit same to the DisCos for onward distribution to end users.