The Electricity Distribution Companies (DisCos) have appealed to the National Assembly to intervene in the current liquidity crisis in the power sector. They said they will need N8.7 billion to comply with the remittance order set by the Nigerian Electricity Regulatory Commission (NERC).
In a breakdown of the required amount, Association of Nigeria Electricity Distributors (ANED’s) Executive Director, Research and Advocacy, Barr Sunday Oduntan said the DisCos will require a monthly amount of N725 million to meet the threshold of 35 per cent remittance level set by NERC in the meantime.
“To meet the new remittance expectations, DisCos will have to finance an average gap of N725 million per month (estimated at N8.7 billion per year), until increased collections bridge the gap,” he said.
ANED in a statement said while the DisCos were expected to do a minimum remittance of N12.69 billion (about 35per cent) for the July 2019 billing cycle from a total N35.79billion invoice from the Nigerian Bulk Electricity Trading Plc (NBET), the DisCos actually remitted N8.06billion.
The outstanding was N4.63billion as the DisCos group said the eight DisCos performed up to 23per cent of the 35per cent required of them for the month. The inability of the DisCos to meet the 35per cent threshold specified by NERC is a direct result of the liquidity crisis in the power sector. It said the Average Technical Commercial and Collection (ATC&C) losses have remained high due to lack of liquidity, unattractive investment terrain and customer apathy to pay bills – a product of suspicion based on estimated billing and electricity theft.
A situation further complicated by three years of delayed Minor Reviews and non-payment of electricity bills by the Ministries, Departments and Agencies (MDAs).
Additionally, with over five decades of significant neglect of the sector, the massive investment that is required for the injection of efficiency desired continues to be undermined by inconsistent and uncertain policy and regulatory changes.
