NERC seeks FG’s help over rising debt, low power supply

Nigerian Electricity Regulatory Commission (NERC) has called on the Federal Government to intervene in debts by international customers and others to the power sector.

This was contained in the 2023 fourth-quarter report, released yesterday.

According to the report, in the quarter under review, electricity Distribution Companies, also known as DisCos, and four international customers serviced by the Market Operator, did not remit  ₦97.5 billion to the power sector in the fourth quarter of 2023.

Statistics obtained from the Nigerian Electricity Regulatory Commission’s 2023 fourth quarter report, indicated that 11 DisCos held unto ₦81billion, while four international customers (Paras SBEE, Transcorp SBEE, Mainstream NIGELEC and Odu-Pani-CEET), did not remit $12 million (₦16.5 billion when converted using ₦1,367/$1 rate) invoice issued to them by the MO for services rendered in 2023/Q4.

This puts total debt by the DisCos and international customers at ₦97.5bn for the period under review.

A breakdown of the debt by the DisCos showed that in 2023/Q4, the cumulative upstream invoice payable by DisCos was approximately ₦270 billion, consisting of ₦223 billion for generation costs from the Nigerian Bulk Electricity Trading (NBET) company, and about ₦47 billion for transmission and administrative services by the MO.

However, out of this amount, the DisCos collectively remitted ₦188.7 billion (₦156 billion for NBET and ₦32.5 billion for MO), with an outstanding balance of about ₦81 billion. This translates to a remittance performance of about 70 per cent in 2023/Q4 compared to the 76 per cent (remittance of ₦158billion out of the total invoice of ₦208.7 billion) recorded in 2023/Q3.

The total revenue collected by all DisCos in 2023/Q4 was ₦294.9 billion out of the ₦399.7 billion that was billed to customers. This translates to a collection efficiency of 74 per cent. In comparison, the total revenue collected by all DisCos in 2023/Q3 was ₦268 billion, out of the ₦349 billion billed to customers which translated to a 76 per cent collection efficiency. The 74 per cent collection efficiency recorded in 2023/Q4 is –2.77 per cent lower than the efficiency recorded in 2023/Q3 (76 per cent).

The report further detailed that none of the four international customers being supplied by GenCos in the Nigerian Electricity Supply Industry (NESI), made payment against the cumulative invoice of $12.02 million issued by the MO for services rendered in 2023/Q4.

The power sector debt continues to rise, as the country battles inadequate power supply as a result of low generation.

The GenCos currently generate about 5,000 megawatts (MW) despite the grid having a combined capacity of about 12,000MW.
Experts have said Nigeria’s over 200 million populace requires at least 30, 000MW to attain sufficiency.

Despite the meagre 5,000MW power generation, the Transmission Company of Nigeria (TCN), has struggled to transmit the same to the DisCos for onward distribution to end users.