…Govt needs to revisit power sector privatisation to address challenges – Expert
By Seun Ibiyemi and Ogaga Ariemu
Following N95.8billion owed by customers, there are indications that all electricity distribution companies (DisCos) may embark on mass disconnection of customers to enable them pay up there deb t with GenCos.
This is coming after the Nigerian Electricity Regulatory Commission (NERC) said electricity distribution companies (DisCos) in Nigeria averaged a collection efficiency of 67.36 per cent in Q1 2022.
The Commission further disclosed that revenue earned during the period was N199.90 billion, out of N295.69 billion billed to customers.
NERC in its first quarter 2022 report released this during the weekend.
The report noted that there were twenty-six (26) grid-connected power stations in 2022/Q1 consisting of nineteen (19) gas, four (4) hydro, two (2) steam, and one (1) gas/steam-powered plants.
NERC said DisCos achieved a billing efficiency of 77.38 per cent.
“The total energy received by all DisCos in 2022/Q1 was 7,300.05GWh while the power billed to the end-use customers was 5,649.21GWh indicating an average billing efficiency of 77.38 per cent.
“This billing efficiency is an increment of +1.02 pp from the 76.56 pent recorded in 2021/Q4.
“The total revenue collected by all DisCos in 2022/Q1 was N199.90 billion out of N295.69 billion billed to customers — this corresponds to a collection efficiency of 67.36 per cent, representing a 1.98 pp reduction compared to 2021/Q4 where the average collection efficiency was 69.34 per cent.
“In monetary terms, although the billing in 2022/Q1 reduced by N7.41 billion (-2.44%), revenue collections reduced at a higher rate – N10.98 billion (-5.22%).”
NERC noted that DisCos must employ technologies and operational procedures to increase both their billing and collection performances to forestall long-term financial challenges.
“These could include holistic energy accounting procedures, customer and infrastructure metering,” they added.
Recorded (ATC&C) Losses: The report declared DisCos had commercial losses of 47.88 per cent comprising aggregate technical and commercial loss (23.44 per cent) and collection loss (30.66 per cent).
“The ATC&C loss increased by +0.97 pp compared to 2021/Q4 (46.91 per cent). All DisCos did not meet their allowed ATC&C loss targets as specified in the MYTO —this means that all DisCos exceeded their efficient loss targets and thereby could not earn the revenue requirement upon which their approved tariffs for the period were set.”
They warned that consistently incurring these inefficient losses could prevent the DisCos from meeting their upstream market obligations and have adverse effects on their long-term financial positions.
There were twenty-six (26) grid-connected power stations in 2022/Q1 consisting of nineteen (19) gas, four (4) hydro, two (2) steam, and one (1) gas/steam-powered plants.
“The plants’ average available generation capacity during the quarter was 4,712.34MW representing a 13.78% decrease (-753.38MW) compared to 5,465.72MW recorded in 2021/Q4,” they added.
In a swift response on recovering its debt from customers, Ibadan Electricity Distribution Company (IBEDC), Spokesperson, Mrs Busolami Tunwase said they have been appealing to customers to pay their bills.
“We are also educating them on the need to pay their Bills for us to serve them better and also remain in business.
“As you know Electricity is no longer a social Service, Market Operators must be paid for us to remain operational.
“We are however intensifying efforts with a more consolidated approach and we believe this will be impactful.”
Also reacting to the development, an energy expert, Mr Eleojo Joseph said federal government needs to revisit power sector privatisation to address challenges.
“The cat and mouse game between the DisCos and consumer is a war that the end is not in sight. The DisCos to most consumers are playing games with them in the sense that there is no electricity supply and yet the DisCos wants to be paid by blackmailing them in disconnecting them whenever there is electricity.
“In most cases, the consumers are not metered and with arbitrary amounts given in the name of estimated billings, this is always the source of the rifts.
“On paper the N95.9bn is the amount of electricity supplied to the DisCos and in most cases, the consumers did not consume the electricity due to one hitch or the order. I have discussed this issue of over billing and the manager said they are under pressure to meet their target. Meet their target when there is no supply?
“On the whole, this brings me to the issue of the Government revisiting and reviewing the privatisation of the power sector. The real electricity company like Eskom and the likes with the technical knowhow and financial muscles should be allowed to come on board and do the needful to this critical sector.
“We are toying with the lives of our people as the economy and businesses will continue to bear the brunt,” he stated.