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Published On: Fri, Sep 7th, 2018

NERC worries over poor remittance by DisCos in Q1 2018

Dr. Anthony Akah, Acting Chairman, NERC

The Nigerian Electricity Regulatory Commission (NERC) has expressed concerns over poor remittance of electricity invoice by the 11 Distribution Companies (DisCos) in the first quarter of 2018.

NERC in its 2018 first-quarter report published on its website on Friday said that tariff deficit was partly responsible for the industry poor remittance, with DisCos remitted only N51.2

billion of electricity invoice out of the total N163.1 billion they received during the period under review.

The latest report indicated that liquidity challenges in Nigeria Electricity Supply Industry (NESI) had continued to manifest in the first quarter of 2018.

It noted that DisCos needed to improve on their remittances, adding that the remittance performance did not reflect the level of revenue collection.

The report said the commission would enforce actions to ensure equitable distribution of market revenue under a structured regime.

It further said that a framework to further ensure transparency in the utilisation of market funds to improve the liquidity in NESI was being developed by the commission.

The commission said was due to the level of remittance of market invoice.

NERC said DisCos remittances were invoices received for energy purchased from the Nigeria Bulk Electricity Trader (NBET) and those received for administrative services from the Market Operator (MO).

“In the period under review, whereas DisCos were issued a total invoice of N163.1billion for energy, only N51.2billion of the invoice was settled, creating a total deficit of N112.0billion”, it said.

NERC said similar to fourth quarter remittances in 2017, none of the DisCos remitted up to half of their market invoices in the first quarter of 2018.

According to NERC, only Eko and Ikeja DisCos settled up to 45 per cent of their market invoices, while all other DisCos settled below 40 per cent of their invoices in the quarter under review.

NERC, however, said overall market remittance improved from 24 per cent in fourth quarter of 2017 to 31 per cent in the first quarter of 2018, but noted that the remittance performance remained significantly low.

“Similar to the fourth quarter of 2017, MO received 40 per cent remittance of the invoice issued for service charge during the first quarter of 2018.

“Although there was no noticeable change in the overall revenue collection efficiency of the DisCos.”

According to NERC, Eko DisCo had the highest remittance of 45 per cent, indicating a 2 per cent drop from its remittance performance in the preceding quarter.

“There was 7.3 per cent increase in total combined remittance to NBET and MO in the first quarter of 2018 relative to the last quarter of 2017,” NERC said.

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