The Federal Government has reported that in 2022, power distribution companies failed to remit N208.8bn to the Nigeria Electricity Supply Industry.
The Nigerian Electricity Regulatory Commission’s Fourth Quarter 2022 Report, along with reports from the preceding quarters, indicate that the Discos failed to make full remittances during this period. The Discos refer to the Distribution Companies responsible for the distribution of electricity in Nigeria.
Eleven power distribution companies operate in Nigeria, distributing electricity to consumers within their designated franchise areas. The Discos encompass Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt, and Yola.
The establishment of the Discos in 2013 was a component of Nigeria’s power sector reforms, which sought to enhance the effectiveness and dependability of electricity distribution throughout the nation.
Customers’ electricity bills are collected by the businesses on behalf of the power market. Through the Nigerian Bulk Electricity Trading Plc and the Market Operator, a division of the Federal Government-owned Transmission Company of Nigeria, they send money to the power market.
However, data from the power sector regulator revealed that the Discos failed to pay a total of N208.8 billion in the fourth, third, second, and first quarters of 2022, or N49.23 billion, N31.3 billion, N58.3 billion, and N69.94 billion.
Commenting on market remittance, in its fourth quarter report, the NERC said, “The combined invoices issued to the Discos in 2022/Q4 was N231.01bn consisting of: i) generation costs from the Nigerian Bulk Electricity Trading company: N188.74bn; ii) transmission and administrative services from the Market Operator: N42.27bn.”
“From this amount, the Discos collectively remitted a total sum of ₦181.78bn (₦145.91bn for NBET and ₦35.87bn for MO) with an outstanding balance of ₦49.23bn.”
The commission claimed that the power firms’ higher-than-allowed Average Technical Commercial and Collection losses were a direct cause of the Discos’ poor remittance.
The NERC added that the 204.84 billion in total invoices sent to the Discos in the third quarter of last year were divided into 164.34 billion for generation charges from the NBET and 40.50 billion for transmission and administrative services from the MO.
“Out of this amount, the Discos collectively remitted a total sum of ₦173.55bn (₦140.67bn for NBET and ₦32.88bn for MO) with an outstanding balance of ₦31.29bn.”
According to the NERC, the combined invoices from the NBET and MO to the Discos in Q2 2022 were N185.01 billion, divided into generation expenses of N149.89 billion and transmission and administrative services of N35.12 billion.
“Out of this amount, the Discos collectively remitted a total sum of N126.69bn (N102.35bn for NBET and N24.34bn for MO) with an outstanding balance of N58.32bn,” the report stated.
