Amidst prevailing liquidity crisis in the power sector, customers of the 11 Distribution Companies (DisCos) owe at least N65.9 billion energy debts for the first three months of 2019, records have shown.
In this piece, Daily Trust dissects a recently published 2019 first quarter report of the Nigerian Electricity Regulatory Commission (NERC).
The commission admitted that, “the financial viability of the Nigerian Electricity Supply Industry (NESI) is still the most significant challenge threatening the sustainability of the industry.”
Daily Trust analysis shows that the total billing to electricity consumers by the 11 DisCos was ₦182.8bn during the period from which they collected ₦116.9bn.
The figure represented 64.1% collection efficiency rate but there are concerns as it declined by 4.1% from the rate obtained in fourth quarter of 2018.
As at December 2018, the DisCos had raised N172.5bn for the fourth quarter and collected N117.5bn; the collection rate was 9.9% higher than the N107bn they collected in Q3 of 2018.
Summing this collection efficiency challenge, NERC said at least N3.6 remains uncollected promptly from every N10 worth of energy sold.
The negative trend reflected in the remittance of DisCos’ revenue to the Nigerian Bulk Electricity Trading Plc (NBET) which pays for bulk energy delivered to the DisCos, and the Market Operator (MO) that collects the ancillary service charges.
Analysis shows that in Q1 of 2019, the 11 DisCos got ₦190.1bn energy invoice from NBET and for service charge by the MO, but they paid only ₦52.8bn – just about 28%.
They retained a N137.3bn deficit.
NERC said the liquidity challenge was partly due to the non-implementation of cost reflective tariffs, high technical and commercial losses worsened by energy theft, and consumers’ apathy to pay.
In another verdict, the commission said: “While the low remittance by DisCos to NBET and MO is partly attributable to the prevailing tariff shortfall, the DisCos must improve on efforts towards reducing the technical, commercial and collection losses to consequently improve sector liquidity.”
The N13.1bn foreign customers’ debt
While Nigeria battles with unpaid N69bn debt from local electricity consumers, the report indicates that special and international customers owe another N13.1bn for just three months. A special customer – Ajaokuta Steel Co. Limited in Kogi State owes N300 million; the two international customers – Societe Nigerienne d’electricite – NIGELEC (Niger Republic) and Communaute Electrique du Benin-CEB (Benin Republic) owe ₦12.8bn.
Neither NBET nor MO received payments from the special and international customers during the period
Metering: 5m consumers on estimated billing
The metering challenge remained unresolved during the period as it was still high. With the concluded customer enumeration exercise, NERC records show there are now 8.840 million registered customers. However, only 3.793m of them are metered representing 43% while 5.04m others are still on the estimated billing, and that is 57% of all customers of the 11 DisCos.
Customers captured by DisCos rose by 110,261 (1.3%) during the period when compared to the fourth quarter of 2018.
The three top DisCos in the metering effort are Abuja, Benin and Port Harcourt DisCos which had metered over 50% of their registered customers as at March 2019. Yola (21%) and Kano DisCo (24%) occupy the lowest rung.
In May 2019, NERC approved the commencement for the metering exercise under the Meter Assets Providers (MAP) to close the metering gap within three years.
Daily Trust however reports that a communique of the recent NERC stakeholders meeting in Lagos revealed that only 26,000 customer meters had been installed under the MAP scheme since its inception on May 1, 2019.
Available data from Abuja DisCo indicates that it has 75% of the total 26,000 MAP installed metered. The 10 other DisCos only did 6,600 meters.
AEDC Managing Director, Engr. Ernest Mupwaya, early September said 19,400 meters have been installed under MAP since May.
Stakeholders at the NERC September meeting held that it is the responsibility of the DisCos to meter their customers as they directed that DisCos take measures, including calling up the Performance Bonds they have with MAPs, to ensure they meet the metering targets.
151,000 complaints filed in 3 months
As the instability in services continues in the power sector, Nigeria’s electricity consumers have continued to express high level of dissatisfaction. This was reflected in the high number of complaints recorded by NERC. At least 151,938 complaints were filed by consumers between January and March 2019. That was 11% higher than the complaint laid in Q4 of 2018.
NERC said 118,563 of the 151,938 complaints were resolved during the period. A breakdown of the complaint type revealed that 92,626, representing 61%, were about metering (31%) and estimated billing (30%).
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