FG Denies N128.3bn Remitted By Discos for Six Months

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FG Denies N128.3bn Remitted By Discos for Six Months
FG Denies N128.3bn Remitted By Discos for Six Months
The federal government of Nigeria has denied N128.3bn remitted by Discos from January to June 2022 according to its separate report for power sector regulation.

This report for the second quarter of 2022 submitted by the Nigerian Regulatory Commission (NERC), released on Thursday, showed that the power firm did not remit N58.32bn in the second quarter of last year.  The power sector regulator said the Discos did not make any outstanding remittance to the Nigerian Bulk Electricity Trading Plc, the market operator and an arm of the Transmission Company of Nigeria.

Punch correspondents recorded that the first quarter report of the commission, showed that Discos failed to remit N69.94bn to the country’s electricity market during the said period, and the NERC was able to disclose that combined invoices from NBET and MO to Discos in the second quarter was N185.01 bn, split into two which are generation costs, transmission and administrative service, at N149.89bn and N35.12bn respectively.

The report disclosed that “Out of this amount, the Discos collectively remitted a total sum of N126.69bn (N102.35bn for NBET and N24.34bn for MO) with an  outstanding balance of N58.32bn,”

While adding that “This corresponds to a remittance performance of 68.48 per cent during the quarter. Poor remittance is a direct consequence of the Discos recording higher than allowed ATC&C (Average Technical Commercial and Collection) performance as established above.”

The commission also added that “Out of this amount, the Discos collectively remitted a total sum of N135.69bn (N109.96bn for NBET and N25.73bn for MO) with an outstanding balance of N69.94bn. This corresponds to a remittance performance of 65.99% during the quarter,”

Data sourced by a correspondent at Punch showed that from Q1 2022 combined invoices from NBET and MO to Discos in the first quarter of last year was N205.63bn which was split into generation costs, – N164.86bn and transmission and administrative services at N40.77bn.

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The lingering liquidity problem in the power sector has been named as the cause of unimpressive remittances by power distribution companies to the electricity market ever since the industry was privatized in November 2013.

Olubiyi also added that “When this moratorium expires by October, naturally it will be without litigation because they’ve given the privatized companies 10 years. And so if in between the lines we try to shift the goal post, then litigation can arise.

“If not for the activities of the banks that are now involved in the day-to-day running of some Discos, there is no way we would have been able to push out this height of impunity in the sector. People make as much as N15bn in a month and they will still have a license for zero remittance.

“As consumers are we not paying our power bills? For the generation companies, don’t they pay for gas? And somebody will collect money on our behalf and will not remit. So this system of privatization cannot work and has not worked since the sector was privatized 10 years ago.”

The Q2 2022 latest NERC report also indicated a collection efficiency by the power distributors for the second quarter of 2022. It said “The total revenue collected by all Discos in Q2 2022 was N188.29bn out of N265.68bn billed to customers. This corresponds to a collection efficiency of 70.87 per cent, which represents a 1.53 percentage point increase compared to Q1 2022 where the average collection efficiency was 69.34 per cent.”