NERC says customers’ apathy to payment, result of estimated billing, poor power supply


20 November 2018, Lagos — The Nigerian Electricity Regulatory Commission, NERC, has said electricity consumers in the country are refusing to settle their bills due to issues arising from estimated billing and poor quality of power supply in most load centres.

The commission disclosed this in its recent report on the state of the power sector, adding that lack of financial liquidity remains the “most significant” challenge affecting the industry.

The liquidity challenge, NERC said, is partly attributed to non-cost-reflective tariffs and high technical and commercial losses aggravated by consumers’ apathy to payment, arising from estimated billing and poor quality of supply.

Out of the ₦171.1 billion billed to customers in the first quarter of 2018, only ₦106.6 billion was recovered, representing 62.3% collection efficiency.

This meant that out of every ₦10 worth of electricity sold during the quarter under review, ₦3.8 is uncollected.

Liquidity challenge in the Nigerian Electricity Supply Industry, NESI, was further reflected in the remittances of the power distribution companies or Discos relative to Nigerian Bulk Electricity Trading, NBET, and Market Operator, MO’s, invoices.

In the first quarter of 2018, Discos were issued a total invoice of ₦163.1 billion for energy received from NBET and for the service charge by MOs, only ₦51.2 billion (31.4%) was settled by Discos, creating a huge shortfall of ₦112.0 billion.

In the period under review, the total invoice issued to international customers, who are connected to the grid in Nigeria through an inter-connector, and have commercial relationship with NBET or other grid users, CEB/SAKETE and NIGELEC and special customer (Ajaokuta Steel) stood at ₦12.2 billion. However, no payment was received from these customers.

NBET manages the long-term diplomatic Power Sale Agreement between Nigeria and Togo/Benin Republic (CEB/SAKETE) and Niger Republic (NIGELEC).

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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