- Soars to N44bn in September
The directive by the Central Bank of Nigeria (CBN) to Nigeria’s deposit banks to take over the collection of revenues from the power Distribution Companies (Discos) has begun to yield positive results, THISDAY checks revealed at the weekend.
The Discos posted a record N44.5 billion revenue collection in September 2020, the highest ever recorded by the power distributors, a month after the apex bank gave the directive, it was learnt.
Before the September record, in August 2020, the month the order was given, data released by the Discos in its third-quarter summary of Key Performance Indicators (KPIs), indicated that another record was posted, with the collection of just a little less than N44 billion, another record before September.
Last year, the circular signed by the CBN’s Director of Banking Supervision, Mr. Bello Hassan, stated that all electricity collections for services provided by Discos should henceforth be domiciled in deposit money banks.
“All energy and non-energy collections of Discos, whether cash or cashless shall only be performed by deposit money banks (DMBs),” the apex bank stated.
But while the argument was that the Discos were under-remitting, the Discos maintained that the invoices received from Nigerian Bulk Electricity Trading (NBET) for electricity supplied do not account for losses in transmission and were, therefore, taking that into consideration before remitting any funds.
With the action, the CBN hoped that that guarantor banks will take up continuous due diligence on the Discos they have guaranteed and give the monetary authority full visibility of the cash flow in the electricity supply industry.
The CBN said in the directive: “The payment or settlement of all NESI related goods or services shall be made through the Nigerian banking system. Consequently, all collections for the payments of NESI regulated goods and services provided by a Disco shall be paid into a designated account.
“This should be done such that collections arising from services rendered by the Disco shall be paid into an account in the sole name of the Disco; collections arising from services rendered by a third party/parties on behalf of the Disco shall be paid into an account in the joint name of the Disco and the third-party vendor(s).
“Any DMB found to be maintaining any account(s) for any entity collecting payments on behalf of any Disco without appropriate authorisation shall have regulatory actions imposed on it.”
Historical figures released by the Discos through their umbrella body, the Association of Electricity Distribution Companies (ANED), showed that in September 2016, the Discos only posted just over N25 billion, in September 2017, they recorded about N28 billion, the same period of 2018 was about N33 billion while for 2019, it was less than N36 billion.
While energy bill in the 12 months preceding September 2020 was N690 billion, the actual collection stood at N483 billion, with an outstanding N207 billion still being owed by various end-user customers.
Data from ANED showed that in all, the Discos posted N483 billion revenue between October 2019 and September 2020, an N17 billion increase in collection compared to the previous 12 months.
The average collection efficiency also rose to a record 76.28 per cent, for the Discos, including Ikeja, Eko, Abuja, Jos, Enugu, Benin, Kaduna, Kano, Ibadan and Port Harcourt.
The Discos, however, noted that the overall Aggregate Technical and Commercial (ATC&C) losses moving average kept increasing smoothly since February 2020 from 43.3 per cent to 46.1 per cent due to the collection crisis caused by the COVID-19 lockdown.
They noted: “The Discos are back on track on their performance improvement after the fall due to the pandemic. Indeed, in September 2020, Discos’ collection reached a new record of N44.5 billion.
“In annual terms, the Discos’ revenue collection in the last 12 months (October 2019 to September 2020) reached a new record of N483 billion, which represents an increment of N17 billion versus the previous 12 months (+3.6 per cent increment).
“Also, in Q3 2020, the collection efficiency rose to 76.28 per cent. Due to the severe impact of the COVID-19 pandemic, in particular during the Q2 2020, the ATC&C loss KPI (moving average) kept increasing and is now at 46. 1 per cent,” the Discos noted.
However, the electricity distributors expressed concerns that since 2015, there had been no significant improvement in the power generated and wheeled by the Transmission Company of Nigeria (TCN).
According to the association, the number of registered end-users had continued to increase, currently at a rate of about 75, 000 new customers per month (+10 per cent in 2019, resulting in more than 9.7 million customers in total.
“In quarter three, the number of registered customers among the 10 private Discos passed the 9.7 million-point. However, many of them are being connected without meters and, therefore, the metering gap is close to 60 per cent, becoming one of the major challenges for Discos,” the Discos said.