Electricity Distributors’ Debts To Market Operator Hit N120.7bn

Electricity Distributors’ Debts To Market Operator Hit N120.7bn

The collective debts owed the Market Operator by the 11 electricity distribution companies (Discos), in terms of stipulated remittances to the MO, may have risen to an all-time high of N120.7 billion.

It was gathered that the shortfall in remittances by the 11 Discos to the MO had been accumulating since the commencement of the Transitional Electricity Market (TEM) in January 2015.

According to the electricity Market Operator’s report on the summary of invoices and remittances by the Discos and service providers since the commencement of the TEM to June 2017, the 11 Discos had been unable to remit a total of N111.37bn, service providers could not pay N125.96bn, while other players could not remit N14.59bn.

In its August 2017 report on the summary of Discos’ invoices and remittances, which was obtained by our correspondent in Abuja, the market operator stated that aside from Eko and Yola Discos, all the other power distributors owed more than N8bn.

An analysis of the report showed that the indebtedness of the power firms increased from the N111.4bn recorded in April this year to N120.7bn in June, which was the most recent month in the records of the MO since the commencement of TEM.

The Federal Government had in 2014 announced the effective date of the commencement of all contractual obligations in the Nigerian electricity market as of January 1, 2015, and stated that TEM would commence the same day.

It explained that the main focus of TEM would be the consummation of all contractual obligations as stipulated in the market rules, adding that the declaration was an attempt to make the market more mature and robust.

A further analysis of the August 2017 report showed the individual shortfall in the amount yet to be remitted by each of the 11 distribution companies since the commencement of TEM up to June 2017.

It outlined the shortfall in remittances of the Abuja, Benin, Eko, Enugu, Ibadan and Ikeja Discos as N17.3bn, N8.6bn, N3.5bn, N15.9bn, N13.3bn, and N13.7bn, respectively.

Others are Jos, Kaduna, Kano, Port Harcourt and Yola Discos, with the shortfall in their remittances to the market put at N9.5bn, N13bn, N10.8bn, N13.1bn, and N1.8bn, respectively.

Power distribution companies are the primary revenue collection arm of the sector and their failure in remitting what is required of them to the MO and Nigerian Bulk Electricity Trading Plc has been impacting the industry adversely since it was privatised, according to operators in the business.

But the power distribution companies on several occasions had defended why they often defaulted in meeting up with remittances to the Market Operator and NBET.

The Federal Government, the power generation companies (Gencos), as well as other stakeholders in the sector have on several occasions complained of the poor remittances and inefficiencies of the power distributors.

The lapses of the Discos made the Nigeria Electricity Regulatory Commission to declare on Monday that it would not hesitate to dissolve the boards of the Discos if they continued to perform poorly over three years after the took over the privatised companies.

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