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Despite epileptic power, DisCos revenue increases to N1trn

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…As unmetered customers hit 5.8m

Despite the persistent epileptic power supply nationwide, revenue generation by electricity distribution companies in Nigeria surged to N1.1trn within the 12 months of 2023, a new report has revealed.

The figure represents an increase of N234.4bn or 28.2 percent from the N831bn generated by the power firms over a similar period in 2022.

This latest data was disclosed in the electricity report released by the National Bureau of Statistics on Monday.

The latest data came despite the sporadic power grid collapses recorded during the year.

Nigeria’s national power grid collapsed 46 times from 2017 to 2023, a report by the International Energy Agency said in a report.

According to the report, Nigerians endured more nationwide blackouts in 2023, especially on September 14 when the grid collapsed due to a fire on a major transmission line.

Despite the challenges, the distribution companies have continued to smile at the bank, allocating outrageous billing to customers.

An analysis of the revenue data showed that the Ikeja Electricity Distribution Company got the highest revenue of N218.6bn, up by 31.7 percent or N52.7bn from N165.9bn recorded in 2022. It was followed closely by the Eko Distribution Company which got a revenue increase of N52.8bn or 42.3 percent from N124.8bn in 2022.

Third on the list is the Abuja Electricity Distribution Company, with a revenue generation of N167.4bn from N125.7bn recorded in 2022.

Similarly, Ibadan Electricity Distribution Company got a revenue of N111.3bn, Enugu Electricity Distribution Company got a revenue of N82.5bn, Yola Electricity Distribution Company (N22.3bn), and Benin Electricity Distribution Company (N84.6bn), and Kaduna Electricity Distribution Company (N32.4bn).

Also, Jos Electricity Distribution Company increased its revenue to N38.9bn, Kano Electricity Distribution Company (N55.2bn) and Port-Harcourt Electricity Distribution Company (N74.7bn).

Findings also showed that the increased efficiency in revenue collection might not be unconnected to rise in the overbilling of customers especially those on estimated billing system.

Also, it was observed that DisCos were able to capture more customers under estimated billings system.

A further analysis stated that the number of metered numbers increased by 9.38 percent or 480,833 while the number of customers under estimated billings reduced slightly by 1.73 percent to 5.8m.

“Similarly, metered customers stood at 5.61 million in Q4 2023, indicating a decrease in the growth rate of 1.32 percent from 5.68 million recorded in the preceding quarter. On a year-on-year basis, this grew by 9.38 percent from the figure reported in Q4 2022 which was 5.13 million,” the report read.

Recently, the Nigerian Electricity Regulatory Commission, declared that it would deduct N10,505,286,072 from the annual allowed revenues of the 11 power distribution companies during the next tariff review as part of sanctions over their non-compliance with the capping of estimated bills for unmetered customers.

It stressed that the billing of unmetered customers in their various franchise areas for 2023 revealed non-compliance with the monthly energy caps issued by the commission.

The commission explained that the DisCos would pay about 10 percent of the amount they over-billed their customers between January and September 2023.

The regulator also ordered the Discos to refund the cheated customers in full and to ensure compliance in the future, stressing that to deter future occurrence, a 10 percent fine had been imposed on the utilities.

Since the start of this year, Nigerians have grappled with intermittent power supply, which has adversely impacted businesses and households, prompting numerous individuals and firms to seek alternative sources of energy.

The poor power supply situation was worsened by the fuel subsidy removal of June 2023, with the jump of the average pump price of petrol from N238.11 per litre to over N600 per litre.

This demand for power has been exacerbated by a succession of heat waves, amplifying the environmental and health-related challenges.

Last week, authorities in public and private hospitals lamented the poor power supply situation amid the high cost of diesel in the country, noting that the poor power supply was affecting healthcare delivery.

Recall that the Minister of Power, Adebayo Adelabu in a post on X (formerly Twitter) attributed the main cause of poor power supply in the country to the low supply of gas to generating companies.

He said the poor supply had impacted the quantum of bulk power available on the transmission grid for onward transmission to the distribution load centres nationwide.

“I had crucial discussions with power Generating companies and Distribution companies to address the ongoing issue of blackouts in parts of our country. After investigations, it’s clear that the main cause of poor power supply is the low supply of gas to GenCos,” Mr Adelabu said.

To stem the tide, the Federal Government had threatened to revoke the licences of power Distribution Companies over persistent poor power supply across the country, but the situation has not changed much.

The situation is partially attributed to the over $1bn indebtedness to gas producers who provide the gas required for running thermal gas-fired power plants amid the collapse of the national grid.

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Energy

Marketers advocate ethanol as alternative fuel, plan $7bn yearly savings

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The Major Energies Marketers Association of Nigeria has stated that ethanol could be adopted as a biofuel to help Nigeria in reducing energy poverty and emissions.

According to MEMAN during a recent quarterly press webinar and engagement, about $7.4 billion could be saved annually by taking advantage of Nigeria’s ethanol resources as a biofuel to support petrol.

Ethanol is a biofuel that is commonly used as a substitute or additive to petrol in vehicles. It is typically produced through the fermentation of plant materials like cassava, corn, sugarcane, and others.

MEMAN noted that ethanol blended into biofuel as a transformative energy source has the potential to change Nigeria’s energy landscape and pave the way for a sustainable economy.

Experts, who spoke at the webinar, revealed that Nigeria had what it takes to exploit its ethanol to biofuel potential.

Presenting a paper titled ‘Ethanol as a Biofuel,’ a Senior Consultant with Africa Practice, Agwu Ojowu, pointed out that developing the ethanol industry could save the nation about $7.4bn ba year.

“Nigeria’s cassava production, standing at 63 million metric tonnes annually, represents 26 per cent of the global total. However, with 40 percent of this yield lost each year, there is a significant economic loss estimated at $7.4bn. Developing the ethanol industry could mitigate these losses, enhance economic stability, and capitalise on the depreciating currency to reduce costs,” Ojowu stated.

He emphasised that ethanol’s higher octane rating improves fuel quality and helps meet environmental standards by reducing sulphur content and greenhouse gas emissions.

Those attributes, he said, make ethanol a cost-effective and environmentally friendly alternative to petrol, aligning with Nigeria’s climate commitments.

Going down memory lane, Ojowu recalled that Nigeria’s foray into ethanol began with the 2007 biofuels policy, which mandated a 10 percent ethanol blend in fuel.

“Despite initial challenges, including the suspension of the policy in 2008, because of blending inconsistencies, the potential of ethanol remains significant. Ethanol’s cost-effectiveness compared to petrol has historically led to economic arbitrage, suggesting that a well-regulated biofuel market could be economically advantageous,” he said.

Ojowu added that ethanol presents numerous benefits, including economic, environmental, and agricultural advantages, without necessitating vehicle modifications.

The Executive Secretary of MEMAN, Clement Isong, also emphasised the role of renewable energy in addressing Nigeria’s energy poverty.

He highlighted the importance of diverse energy sources, including biofuels, solar, hydroelectricity, and wind energy, to create a balanced and sustainable energy mix.

“MEMAN is committed to engaging with industry stakeholders to advocate for energy solutions that meet Nigeria’s needs,” Isong said.

He expressed optimism about the future of renewable energy in Nigeria and the continued efforts to enhance press engagement and industry collaboration.

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Energy

Abuja DisCo adds 45 new feeders to Band A

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The Abuja Electricity Distribution Company, (AEDC) has disclosed it has added 45 new feeders to the Band A category of customers who would enjoy a minimum of 20 hours of electricity as stipulated by the Nigerian Electricity Regulatory Commission (NERC).

The new feeders are majorly in the Asokoro, Wuye, Garki, Suleja, Apo and other areas of the capital city. This was disclosed by the Disco on their official X (formerly Twitter) page where it described the feeder location and specific areas served by the feeder.

Other areas where feeders were upgraded to band A include; Suleja, Garki Area II, Wuse, Anyigba, Mpape, Jabi, Gwagwalada, Gwarimpa etc.

The DisCo noted that the upgrade to band A for the affected feeder location is effective from June 1, 2024.  Similar upgrades across other DisCos

In April, the Nigerian Electricity Regulatory Commission (NERC) announced a more than 200 percent increase in electricity tariffs for Band A customers.

This move is part of efforts to eliminate electricity subsidies and implement a cost-reflective tariff system in the power sector.

Abuja Disco’s addition of new feeders to Band A is in line with similar actions by other distribution companies like Eko and Ikeja DisCos following the tariff hike.

Band A customers are on specific feeders that receive a minimum of 20 hours of electricity daily. According to NERC, these customers account for approximately 17 percent of all electricity users in the country.

The decision to raise electricity tariffs for Band A customers has sparked public outrage, particularly among trade and labour unions nationwide.

Organised labour members have protested the increase, while the Manufacturers Association of Nigeria (MAN) has advised its members not to pay the new tariff, claiming they were not consulted.

MAN has instructed its members to continue paying the old rate of N66/kWh. The various electricity distribution companies have vowed to disconnect customers who fail to pay the new tariff under their band.

The group has also filed a petition with NERC regarding the tariff hike, which is currently awaiting resolution.

Furthermore, the Organised Private Sector (OPS) comprising all chambers of commerce and trade associations across the country had warned that the new tariff could lead to the shutdown of 65 percent of businesses across the country.  The group stated that the over 200 percent hike in electricity tariff to N220/KWh then made Nigeria’s power cost the highest in the world. It warned that the hike could exacerbate the economic situation in the country and push more people into unemployment and poverty.

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Energy

Settlement agreement: NNPC asks court to discontinue lawsuit against Mobil subsidiaries

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The Nigerian National Petroleum Company Limited (NNPC) has filed a motion to discontinue its lawsuit against Mobil Nigeria subsidiaries and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in the High Court of the Federal Capital Territory, Abuja.

The motion is aimed at finalizing a settlement agreement for the divestment of Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited for $1.28 billion.

NNPC’s legal counsel, Afe Babalola & Co., presented the motion, requesting the court’s permission to withdraw the suit and strike it off the court’s cause list.

The motion cites legal precedents, including the Supreme Court decision in Adama v. Maigari (2019), which supports the relisting of a discontinued suit if the out-of-court settlement fails.

The lawsuit, originally filed by NNPC on July 5, 2022, was referred to arbitration on August 3, 2022.

Recent negotiations have led to an out-of-court settlement decision, with the Settlement Agreement requiring NNPC to withdraw the lawsuit.

The court is currently considering the motion, which, if granted, would pave the way for the parties to complete the settlement and divestment transaction.

No further details have been released, but sources indicate that the settlement agreement includes clauses designed to align the interests of all parties and finalize the transaction.

The development is seen as a significant step towards resolving the longstanding dispute between NNPC, the Mobil subsidiaries, and NUPRC.

Approval of the motion would allow the parties to focus on finalizing the settlement and completing the divestment transaction.

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