Business

Nigerians consume N193.66bn worth of electricity in 4 months

Nigerians consumed N193.66 billion worth of electricity in just four months of September, October, November and December 2019.
Power industry regulator, Nigerian Electricity Regulatory Commission (NERC), which declared this in a document sighted by New Telegraphat the weekend, maintained that the power consumption pattern was reflected in the total invoice of N193.66billion issued to 11 distribution companies for energy received from the Nigeria Bulk Electricity Trading Company (NBET).
It added, however, that though the N193.66 billion invoices were issued in the fourth quarter of 2019, the 11 electricity distribution companies (DisCos) failed to remit N119.46 billion out of the money to the market operator (MO).

NERC, in its report on the quarter under review, said: “But only a total of N74.20 billion (i.e. 38.32 per cent) of the invoice was settled as and when due, creating a total deficit of N119.46 billion including tariff shortfall.

“A comparative analysis of market invoice performance by DisCos in 2019/Q4 indicates an average settlement rate per DisCo of 34.24 per cent of the invoice.”
“Only Abuja and Eko DisCos achieved a settlement rate of 50 per cent of their market invoices during the quarter under review.

“Although Jos DisCo achieved slight progress as compared to the third quarter, its 19.57 per cent remittance performance was the lowest recorded among the DisCos followed by Yola DisCo 22.52 per cent.”

On revenue collection and efficiency, the NERC said the total revenue collected by 11 DisCos from customers in the third quarter of 2019 stood at N127.14 billion out of the total billing of N183.10 billion.

Following the increase in the billing efficiency recorded in the quarter under review, the report said relative to the preceding quarter, the total revenue collected as a ratio of the total billing by DisCos slightly increased.

NERC noted that the overall efficiency collection by all the DisCos increased to 69.44 per cent in the fourth quarter of 2019, representing a 0.45 per cent point decrease from 68.99 per cent collection efficiency recorded in the previous quarter.
The commission explained that the collection efficiency implied that for every N10.00 worth energy billed to customers by Discos in the third quarter, N3.06 remained unrecovered from customers as when due.

The report said notwithstanding its increase from the preceding quarter, the collection efficiency by the DisCos was still low and has continued to adversely impact the financial liquidity of the industry, which in turn, has led to low investment in NESI.

NERC had earlier posted on its Twitter handle that the Discos had 14 days beginning from June 4, 2020, to explain why the commission should not sanction them over their alleged non-compliance with the order.
Despite an order by the sector regulator limiting DisCos from charging outrageous bills, customers were still reporting excessive charges as power companies try to recover losses caused by COVID-19 on the back of long-suffering unmetered customers.

NERC had issued directive on Transitional Capping of Estimated Bills issued to unmetered customers by DisCos, in February, placing a cap on estimated bills that can be issued to unmetered customers, but it has failed to enforce it leading to gross abuse.

According to NERC, the order canceled the Estimated Billing Methodology Regulation as a basis for computing the consumption of unmetered customers by DisCos, capping the maximum bill an average unmetered customer can pay to N1,875.

In April, some DisCos wrote to NBET, who manages the money pool in the electricity supply industry, warning that COVID-19 was having a raving impact on their business operations and constrains their ability to pay for the electricity contracted to them for sale and recover cost.

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