The indebtedness of power consumers to electricity distribution companies hit N62.2bn within a space of three months, the Nigerian Electricity Regulatory Commission has said.
The debt was recorded in the second quarter of last year.
According to NERC in its latest report on the commercial performance of the power sector, electricity users paid N111.5bn out of the total of N173.7bn that was given to them as bill by the 11 power distribution companies operating in Nigeria.
The commission said the indebtedness, which was recorded in the second quarter of 2018, was contributory to the financial illiquidity in the power sector, adding that the liquidity crisis in the sector had remained one of the major challenges in the industry.
NERC said, “Financial illiquidity remains one of the most significant challenges threatening the sustainability of the power industry. The liquidity challenge is partly attributed to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft, and consumers’ apathy to payments under the widely prevailing practice of estimated billing.
“The total billing to electricity consumers by the 11 Discos was N173.7bn in the second quarter of 2018 but only a sum of N111.5bn was the aggregate collection representing 64.2 per cent collection efficiency.
“The collection efficiency indices indicate that a sum of N3.58 out of every N10 worth of electricity sold during the second quarter remains uncollected, as and when due. The liquidity challenge in NESI (Nigeria Electricity Supply Industry) was further reflected in the Discos’ remittances to NBET (Nigerian Bulk Electricity Trading) and MO (Market Operator) relative to associated energy invoices.”
The commission further stated that in the second quarter of 2018, the 11 Discos were issued a total invoice in the sum of ₦161.4bn for energy from NBET and for service charge by the MO, but only N53.7bn (33.3 per cent) was settled by Discos, creating a significant deficit of N107.7bn in the market.
NERC stated that the Discos’ collection efficiency ranged from 40 per cent for Jos Discos to 83 per cent for Ikeja Disco, adding that remittance performance ranged between 10 per cent for Jos and 46 per cent for Ikeja.
It stated that in the period under review, the total invoice issued to international customers, namely CEB/SAKETE and NIGELEC, and special customer, Ajaokuta Steel Company Limited, stood at N13.3bn.
Source: Punch
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