Power generation companies are owed a total of N361.67bn by the Nigerian Bulk Electricity Trading Plc for electricity generated, sold and fed into the national grid from January to August this year.
The government-owned NBET buys electricity in bulk from Gencos through Power Purchase Agreements and sells through vesting contracts to the distribution companies, which then supply it to the consumers.
Latest data obtained by our correspondent from the bulk trader on Tuesday showed that it only paid 16.75 per cent of the total invoice it received from the Gencos in the eight-month period.
NBET received a total invoice of N434.42bn from the Gencos for the amount of electricity delivered to the grid but only paid N72.75bn to them.
The Gencos include the successor companies carved out of the defunct Power Holding Company of Nigeria, the Niger Delta Power Holding Company (which manages government-owned power plants built under the National Integrated Power Project scheme), and Independent Power Producers.
NBET paid the Gencos N5.75bn for January invoices of N54.18bn; N2.84bn out N54.01bn in February; N2.84bn out N49.78bn in March; N12.28bn out of N56.38bn in April; and N14.67bn out of N54.44bn in May.
The bulk trader paid N8.39bn out of N55.09bn in June; N11.05bn out of N56.65bn in July; and N14.93bn out of N53.89bn in August.
Data obtained from the Gencos showed their available generation capability stood at 5,346.05 megawatts in January; 6,024.45MW in February; 5,663.03MW in March; 5,652.18MW in April; 5,437.33MW in May; 5,445.07MW in June; and 6,168MW in July.
But the total electricity generation in the country averaged 4,002.52MW in January; 4,208.67MW in February; 4,233.58MW in March; 4,068.10MW in April; 3,861.14MW in May; 3,710.88MW in June, and 3,737.88MW in July.
The PUNCH exclusively reported on November 12, 2019 that power distribution companies failed to pay a total of N322.14bn to NBET for the electricity sold to them from January to August this year.
The Gencos, through their umbrella body, the Association of Power Generation Companies, recently complained that their payments from NBET for energy delivered to the grid had reduced drastically, dropping from about 80 per cent to 15 per cent.
The Executive Secretary, APGC, Dr Joy Ogaji, said the promise that Gencos’ invoices would be settled 100 per cent by NBET in the Transition Electricity Market had failed, placing a big financial burden on them.
She said, “The promise provoked some additional investments by Gencos with its attendant high cost of capital leading to increased debt profile. The Gencos were made to bear the brunt of this lacklustre performance on the part of NBET.
“The Federal Government, in its magnanimity, intervened to ameliorate the plight of the Gencos by introducing various instruments to partially pay Gencos for energy delivered, while capacity not utilised but made available is yet to be accounted and paid for.”
The Nigerian Electricity Regulatory Commission has continued to describe the financial viability of the Nigerian electricity supply industry as the most significant challenge threatening the sustainability of the industry.
It said the liquidity challenge was partly due 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 regulatory agency said to ensure business continuity and improve sector liquidity, Discos must improve on efforts towards reducing their aggregate technical, commercial and collection losses.
Source: Punch
