DisCos Owe N112bn for Electricity, Fail Loss Reduction Target in Q1 2018

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DisCos Owe N112bn for Electricity, Fail Loss Reduction Target in Q1 2018

The 11 electricity Distribution Companies (DisCos) owe N112 billion as debt for energy delivered to their networks in the first three months of 2018 but failed to meet their losses reduction target, a report by the Nigerian Electricity Regulatory Commission (NERC) has shown.

Electricity The Flow Chat
Electricity The Flow Chat

The exclusive Quarter 1 ranking released this month showed that out of a total N163 billion invoices handed to the DisCos for energy charge payment, ancillary and service charges, they were able to pay only N51bn, leaving N112bn outstanding.

The breakdown revealed that the Nigerian Bulk Electricity Trading Plc (NBET) presented N137bn invoice of the total invoice as energy charge from which N40bn was remitted and N97bn is pending.

Equally, the Market Operator (MO), a section of the Transmission Company of Nigeria (TCN) presented N26bn invoice and the DisCos paid N11bn from it leaving an outstanding N15bn, Daily Trust analysis showed.

On the reduction of their Average Technical, Commercial and Collection (ATC&C) losses, the report showed that none of the DisCos met their target of reducing their losses for the quarter with indication of high losses continuing, nearly five years after the privatisation exercise.

Records show that only Eko DisCo was near its target of 20.56 per cent as it reduced the losses to 26 per cent. Ikeja DisCo targeted 12.47 per cent but was at 35 per cent at the end of the first quarter; Abuja DisCo was next as it targeted 22.33 per cent but still remained at 45 per cent.

Eight other DisCos had losses that were above 50 per cent even when their respective targets were below 40 per cent. The worst of all the losses was recorded at Jos DisCo: it targeted reducing the losses to 22.06 per cent but ended at 76 per cent.

Kaduna DisCo had targeted 11.23 per cent benchmark but the losses were as high as 71 per cent in the first three months of 2018, the record showed.

The overall scorecard of the DisCos based on some Key Performance Indicators (KPI) revealed that Kaduna and Kano DisCos had the worst weighted score of -11.7 per cent and -6.3 per cent respectively, far behind the nine others on positive line.

The six indicators are NBET remittance pegged at 30%, metering progress (20%), MO remittance (15%), Energy revenue collection (15%), ATC&C reduction (10%) and HV Index (10%) culminating in a 100 per cent score.

Kano DisCo scored 5% and 3% on remittances to NBET and MO; Kaduna DisCo was lower at 3% and 2% remittances. Jos DisCo was the third worst performing firm, but it was positive with 8.9% weighted score.

Eko DisCo emerged the highest performing DisCo with 59.6% weighted score, having 12% and 11% remittances from a score grade of 30% and 15%. Ibadan DisCo was next on the high scoring firms with 49% score, while Abuja Disco came third.

The NERC report threw up grey areas that must be dealt with by the DisCos’ investors. It noted that low performance, especially on investment in the networks, has persisted as seen in the low reduction level of ATC&C and the slow metering progress.

It also identified huge deviation from ATC&C target set by the DisCos for the quarter. This is further compounded by the low remittances of energy revenue which it termed as ‘market indiscipline and contract ineffectiveness’.

The regulatory umpire then recommended that there was need for increase in distribution infrastructure and the increasing of injection and distribution capacity nationwide.

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