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Nigerian electricity supply industry suffers ₦119.46bn deficit in Q4 2019



Nigerian Electricity Regulation Commission (NERC), said the Nigerian Electricity Supply Industry (NESI) recorded N119.46 billion deficit in Q4 quarter of 2019.
NERC said the 11 Electricity Distribution Companies (DisCos) only remitted a total of ₦74.20 billion out of the ₦193.66 billion invoice issued to them for energy received and administrative charges during the period.
The Fourth Quarter Report was obtained by the News Agency of Nigeria (NAN) in Lagos from the website of NERC, which is the regulator of the industry.
NERC said liquidity challenge was still a major issue in NESI despite the recent improvement in Aggregate Technical, Commercial and Collection (ATC&C) losses by the 11 Electricity Distribution Companies (DisCos).
“This is evidenced in the DisCos’ international and special customers’ remittances to Nigerian Bulk Electricity Trading Plc (NBET) and Market Operators (MO) during the fourth quarter of 2019.
“During the fourth quarter, DisCos were issued a total invoice of ₦193.66 billion for energy received from NBET and for administrative services by MO.
“However, only a total of ₦74.20 billion (38.32 per cent ) of the invoice was settled as and when due, creating a total deficit of ₦119.46 billion including tariff shortfall, ” the regulatory agency said.
NERC said Eko DisCo recorded the highest remittance rate (51.50 per cent) in the fourth quarter of 2019 followed by Abuja with 51.27 per cent remittance rate.
It added that although Jos DisCo’ settlement rate improved during the fourth quarter, its remittance rate of 19.57 per cent was the lowest in the fourth quarter of 2019.
NERC also disclosed that total market invoices were issued to the special customer (Ajaokuta Steel Co. Ltd) and the international customers ( Societe Nigerienne electricity (NIGELEC )and Communaute Electrique du Benin (CEB) during the same period.
According to NERC, N29.50 million was issued to Ajaokuta Steel Company while N2.07 billion was issued to NIGELEC and CEB respectively.
The commission, however, said neither NBET nor MO received payments from these customers during this period.
“Although there has been a significant improvement, the challenge of low remittance to the market is still a concern to the commission as it is one of the main causes of the
liquidity crisis facing NESI.
” Low remittance adversely affects the ability of NBET to honour its financial obligations to Electricity Generation Companies (GenCos).
“Also, service providers struggle with the paucity of funds impacting their capacity to perform their statutory obligations,” NERC said.
It, therefore, urged the DisCos to rapidly improve on their revenue collection from customers to fulfil their remittance obligations and mitigate financial distress in NESI.
NERC said to enforce payment discipline and compliance with the minimum remittance, it had during the fourth quarter, began enforcement action against DisCos that defaulted in the third quarter billing cycle.
Following the commencement of the enforcement by the Commission, all DisCos except Enugu DisCo have met their expected Minimum Remittance Threshold for the third quarter.

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