Discos Revenue Hits N114.29bn As NERC Laments Energy Debts By MDAs

The Nigerian Electricity Distribution Companies in first quarter of 2020, collected a total revenue of N114.29bn out of the total bill of N186.82bn.

This is contained in the latest quarterly report of the Nigerian Electricity Regulatory Commission.

A study of the report shows that over 38 per cent or N72.53bn of the total bill for the period were yet to be collected from consumers

It said, “The collection efficiency implies that for every N10 worth of energy billed to customers by Discos in the first quarter of 2020, approximately N3.88 remained unrecovered from customers as and when due”.

“To the observed trend in billing efficiency relative to the preceding quarter, the Discos’ collection efficiency (i.e. the total revenue collected as a ratio of the total billing by Discos) declined in 2020/Q1.

“The overall collection efficiency for all Discos decreased to 61.18 per cent in the first quarter of 2020 representing 8.26 percentage points decrease from the 69.44 per cent collection efficiency recorded in 2019/Q4.”

The Comission explained that the low collection efficiency combined with billing inefficiency has continued to affect the financial liquidity of the industry, leading to low investments.

The report further put the total energy generated in the period at 8,613,998 Megawatts, representing a 6.33 per cent more than the energy generated during the preceding quarter.

Within the same quarter, the industry recorded a peak daily generation of 5,268MW.

NERC explained that there was improved capacity utilization, which it attributed to reductions in constraints such as gas supply shortage, and transmission as well as distribution networks bottlenecks.

It said, “Notwithstanding the progress recorded during the quarter under review, the aforementioned industry constraints still pose major technical and operational challenges to the industry.

“The resolution of technical and operational constraints in NESI remains one of the top priorities of the commission.

“To this end, the commission has continued to work on addressing the Disco-TCN interface bottlenecks to free up part of the stranded generation capacity by addressing the technical constraints inhibiting the flow of energy.”

The Commision noted that one of the contributory factors to high losses, and hence poor liquidity, is non-settlement of energy bills by Ministries Department and Agencies of government, across the three tiers.

“This issue must be urgently addressed as part of the ongoing Federal Government’s efforts towards ensuring financial sustainability of NESI,” it said.

The Commission, noted the slight improvement in the grid network stability during Q1, 2020 relative to 2019/Q4, and stated that it was finalising the review of the Performance Improvement Plans filed by Discos.

This would cover the period 2020-2025 with an overall objective of ensuring that utilities invest in projects critical would address technical and other challenges affecting their operational efficiency.

It noted that the review of the PIPs is expected to among others appraise, Discos’ proposed utilisation of capital and operating expenditure allowances for relevance and cost efficiency and the investments required by Discos towards addressing distribution networks bottlenecks to free up part of the stranded generation capacities

As for energy received from the Nigerian Bulk Electricity Trading PLC and for service charge by Market Operators, NERC said that onl N60.20bn of the total invoice was settled, representing 32.53 per cent remittance performance.

“This represents a 5.79 percentage point decline from the final settlement rate recorded on the the average fourth quarter of 2019,” it added.

The international customers, as cited in the report had started offsetting their indebtedness to the country.

It said a total of N4.05bn ($13.22m) invoices were issued to international customers during the period.