- Record N124.3b deficit
The Nigerian Electricity Regulatory Commission (NERC) said the 11 Distribution Companies (DisCos) collected N442.6 billion in 2018.
It was learnt at the weekend from a document which The Nation obtained in Abuja: “The total billing to electricity consumers by the 11 DisCos was N680.6billion in 2018, but only N442.6billion (representing 65 per cent collection efficiency) was collected from customers as at when due.’’
The commission said though the collection efficiency increased by about five percentage points relative to 2017, it indicated that about N3.50 out of every N10 worth of energy sold in 2018 remained uncollected.
The document entitled: ‘’2018 Annual Report & Accounts, 31 December 2018’’, said the severity of the liquidity challenge in NESI was further reflected in the settlement rate of energy invoices issued by NBET and MO to DisCos.
In the period under review, the DisCos were issued a total invoice of N671billion for energy received from NBET and for administrative services from MO, but only N206.7billion (31 per cent) was settled by DisCos, creating a deficit of N464.3billion in the market.
NERC said to sustain the improvement recorded in grid stability in subsequent years, in collaboration with Transmission Company of Nigeria (TCN), it shall continue to intensify its monitoring and supervision to ensure strict compliance with the system operator’s directives to generators on free governor an frequency control mode in line with the provisions of the operating codes in the industry.
The report said the Commission shall continue to work with TCN on the efficient and competitive procurement of adequate ancillary services to ensure effective management of the national grid.
According to the document, the financial liquidity of the electricity supply industry continues to be the most significant challenge threatening the sustainability of the industry.
It said: “As reported in the preceding annual report, the liquidity challenge is partly due to the non-implementation of cost-reflective tariffs, the incidence of high technical and commercial losses exacerbated by energy theft, and consumers’ apathy to paying for services under the widely prevailing practise of estimated billing.”
On operational performance, the report said the Commission continued with its regulatory function of monitoring the operational and commercial performance of the Nigerian Electricity Supply Industry (NESI) in line with its mandates derived from the EPSR Act.
It explained that during the year 2018, the total electric energy generated was 33,820,503MWh representing a 6.7 per cent increase from the generation level in 2017.
The industry, said NERC, recorded a highest daily peak generation of 5,191MW in the fourth quarter, on the 20th day of November 2018.
It noted that the utilisation of the total available generation capacity remained at 52 per cent during the period under review.
NERC said: “48 per cent of the average available capacity (2,839Mw) was still constrained by a combination of factors comprising gas supply shortage, water management at the hydropower stations, limited transmission capacity, limitations on distribution networks and commercially induced load limitation by DisCos.
“Complete resolutions of the technical and operational constraints in the industry remain as a top priority of the Commission.
The Commission is working on addressing the DisCos-TCN interface challenges with the aim of freeing up the generation capacity constraint by addressing the bottlenecks inhibiting the flow of energy.
“In line with the 2017-2020 Strategic Plan, the Commission is committed to utilising a more robust process for the thorough technical assessment of DisCos’ utilisation of capital expenditure allowances for relevance and cost efficiency to ensure that utilities invest on projects critical to tackling their technical and operational challenges. This process is in line with the regulatory imperative of ensuring that consumers do not pay for inefficiencies of the utilities.”
