Energy

Liquidity crisis: FG to approve new licenses for electricity distribution, bill collection

By Samuel Ibiyemi

The Federal Government has announced plans to approve licenses for service providers willing to specialize mainly in collection of electricity bills within the franchise area of electricity distribution companies (DISCOS). This is to resolve liquidity crisis facing electricity distribution companies as a result of difficulties in collection of electricity bills from customers such as government agencies, the Armed forces, Police and other residential customers in city centres.

Minister of Power, Works and Housing  Mr Babatunde Fashola disclosed that the decision is contained in the new  Power Policy to be finalized  on completion of consultation with stakeholders. He noted that the operators of these licenses will be selected by Discos so as to ensure that they have input into the appointment of service providers that will collect electricity bills in a particular area within the franchise of a Disco’s territory.

Mr Fashola  also stated in a presentation made at the Quarterly Dinner of The Petroleum Club at the weekend that licenses to be approved will receive certain amount of power from each Disco for distribution to customers within a particular segment of the Disco’s franchise. He noted that the licensee will be responsible for collection of electricity to ensure effectiveness of operation and improve liquidity in the power sector particularly by Discos.

The Discos have been at the receiving end of being blamed for the poor performance of power sector  resulting from liquidity crisis. These Discos have been accused of investing little or nothing to improve their networks and services since they took over four years ago. They have also been criticized for failing to take more power from the grid to their customers and therefore increasing the volume of power stranded at the Gencos.

The Chairman of Ikeja Electric Mr Kola Adesina said in a text message that anything done to lift the value offerings of all service providers must be supported. However, he noted that liquidity is Still a tall mountain to climb to resolve most sectoral issues. “The task to electrify every home is one that must be done,” he said.

Also  in reaction to NigerianNewsDirect enquiry, the Assistant General Manager Corporate Affairs Eko Electric Mr Idemudia Godwin  stated that the Federal Government knows better on how to move the sector forward. He gave the assurance that the Discos will not kick against the decision of the government so long as the investors are carried along. “ So much has been invested in the power sector by the owners. It will only be fair to have the investors in the picture since they all have the same goal of providing power to the people,” he said.

It will be recalled  that the Federal Government had approved  N701billion financial security for the Nigerian Bulk Electricity Trading Plc (NBET) to conveniently trade with electricity generation companies (Gencos) in Nigeria’s electricity market and promised to pay off verified debts owed electricity distribution companies (Discos) by its ministries, departments and agencies (MDAs).

A report presented recently by a Senior Special Assistant to the president on power, Damilola Ogunbiyi shows that the government indicated it would shortly conclude an ongoing audit of the MDAs debts owed the Discos, and subsequently pay off all verified bills to them.

The Federal Government also demonstrated its commitment to lead the power sector out of its financial recession recently with the promise to  pay the outstanding bills on a first-come-first-served basis, and then proceed to ensure that future bills for power consumed by its agencies are paid for promptly.

The government and Discos have had running battles on the actual amount owed as unpaid electricity services to the MDAs, with figures from both sides often at variance.

According to verification report by the Senior Special Assistant to the President on power  said the Discos’ data from which the N59.3 billion debt figure was derived from 208,030 invoices and 15,409 accounts.

Also, 86 per cent of the debts, amounting to N51 billion, were reportedly owed by the top 100 customers, mainly composed of military and defence installations around the country.

Analysts said the success of these companies to distribute and collect electricity bill will depend on the support of the Federal Government to deduct electricity bills of Ministries, Departments and Agencies (MDAs) directly from source.

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