…as DisCos record N81bn revenue shortfall
International customers being supplied by the Nigerian electricity Generation companies (GenCos), have failed to make payment against the cumulative invoice of $11.16 million issued by the market operator for services rendered in the third quarter of 2023, BusinessDay has learnt.
According to the Nigerian Electricity Regulatory Commission (NERC) Q3 Report, the international customers include: PARAS and Transcorp Société Béninoise d’Energie Electrique (SBEE) of Benin Republic, Odukpani Compagnie Energie Electrique du Togo (CEET) and MAINSTREAM NIGELEC- electric power generation and transmission utility in Niger with an outstanding invoice of $2.42 million, $2.62 million, $4.16 million and $ 1.96 million respectively.
“None of the four (4) international customers being supplied by GenCos in the NESI made payment against the cumulative invoice of $11.16 million issued by the MO for services rendered in 2023/Q3.
“The recurrent delay of remittances by international and bilateral customers 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 Report stated.
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Also, the total revenue collected by the 11 distribution companies (DisCos) was ₦267.61 billion, being a shortfall of over N81 billion from N349.55 billion billed to customers in the period. This translates to a collection efficiency of 76.56%
According to NERC, the significant under-recovery of the invoices issued to customers by DisCos is driven by a lack of willingness of customers to pay bills as at when due, unsatisfactory DisCos’ services and inadequate customer metering among other challenges.
The Federal Government, due to the inability of DisCos to collect the total amount of electricity billed to customers, has paid a total of N375.8 billion as a subsidy for Electricity consumed in the country from January to September 2023.
A breakdown showed that N36 billion was paid as subsidy in the first quarter, N135.2 billion in the second quarter, and N204.6 billion in the third quarter.
It further stated that the most proven method for reducing collection losses is the installation of meters (especially prepaid meters for non-maximum demand customers). “Therefore, DisCos are expected to utilize one or more metering frameworks provided for in the NERC MAP and NMMP metering regulation (2021) to improve end-use customer metering in their franchise area. This will reduce commercial and collection losses and will ensure the flow of funds to upstream market participants in the sector.
“Furthermore, DisCos must also continue to evaluate options for improving the optimization of their energy delivery in line with the Service Based Tariff (SBT) regime to ensure that sufficient energy is supplied to customer groups/clusters with the highest collection efficiencies”, it stated.
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Sanusi Garba, the Commission’s chairman had earlier stated that the Federal Government might be expected to pay as high as N1.6 trillion to subsidise electricity in 2024.
According to him, from 2015 almost N2 trillion has been paid by the Federal Government in subsidies and this is because of the huge gap between what revenue should have been and what it has been.
