Discos Generates N293bn Revenue

Date:

June 6, 2024.

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Azonuchechi Chukwu.

Power distribution companies made a total of N292.71bn revenue in the first quarter of this year despite complaints of inadequate electricity supply by consumers and concerns about the huge indebtedness for power generation by producers of the product.

According to the Latest fact sheets on the commercial performance of distribution companies obtained from the Nigerian Electricity Regulatory Commission on Wednesday, showed that the power firms raked in N95.26bn as revenue collections from their various customers in January 2024.

The NERC documents indicated that the 11 Discos had billed power users under their respective franchise areas a total of N130.92bn in January this year.

 

In February, the power firms billed their customers N113.05bn but collected a total revenue of N97.01bn.

In March, the revenue collected by Discos increased to N100.44bn, out of a total billing of N126.56bn in the third month of the year.

But as electricity distributors smile to their banks, power producers, on the other hand, have continued to complain about the lack of adequate payment for the electricity they produce and supply to the national grid.

Similarly, consumers have also raised alarm over the poor supply of electricity across many locations in Nigeria by Discos.

For instance, on Sunday,  power generation companies declared that the sector’s indebtedness to companies that produce electricity had increased to N3.7tn and that this was a threat to further electricity production.

Electricity producers under the aegis of the Association of Power Generation Companies drew the attention of the Federal Government and key stakeholders to the need to urgently address the issue of inadequate payment for electricity generated by Gencos and consumed on the national grid.

Association of Power Generation Companies drew the attention of the Federal Government and key stakeholders to the need to urgently address the issue of inadequate payment for electricity generated by Gencos and consumed on the national grid.

According to a statement issued in Abuja by the Board Chairman, Power Generation Companies, Col. Sani Bello (rtd), the inadequate payment was currently threatening the continued operation of their power generation plants.

“Gencos are currently owed over N2tn for the power they had generated, put onto the national grid, and consumed by end users. This is in addition to the over N1.7tn funding gap created in the recent supplementary MYTO order 2024 without a designated fund to fill the gap.

“This huge debt outlay is now greatly inhibiting Gencos’ ability to meet their obligations to lenders, necessary maintenance, spare parts procurements, employee-related commitments, etc.

“The Gencos’ expectations of being settled through external support such as the World Bank Power Sector Recovery Programme have also been dampened due to other market participants inability to meet their respective distribution linked indicators enshrined in the PSRP,” the firms had stated.

They said access to forex is another problem given that major operation and maintenance needs in the generation subsector are dollarised, as the importance of a specialised window or stable dollar allocation option for the Gencos cannot be overemphasised.

“Gencos are of the position that there is need for a coordinated approach by all stakeholders in the NESI (Nigeria Electricity Supply Industry) to address the liquidity issue realistically and sustainably in the power sector so that Nigerians can have access to reliable electricity supply.

“In the light of the severity of the issues highlighted above, the Gencos are requesting that immediate and expedited action is taken to prevent national security challenges that may result from the failure of the Gencos to sustain steady generation of electricity for Nigerians.

“Gencos liquidity challenges is further worsened by the various policies introduced such as the payment waterfall in the NESI, which deprioritises payment to Gencos. The implication of this is that Gencos only get paid a portion of their invoices (nine per cent, 11 per cent) from whatever amount is left,” the stated.

According to the power firms, this was an aberration as it is a clear departure from existing terms of the Power Purchase Agreement guiding the contractual relationship between Gencos and the Nigeria Bulk Electricity Trading Plc, by which NBET as buyer has contracted to purchase the available capacity as agreed under the PPA.

Gencos should be accorded the utmost priority when it comes to payment to enable them to have the capacity to continue to produce electricity, they argued.

They demanded that the government should urgently put Gencos in a position to continue generating power through the immediate implementation of payment plans to settle all outstanding Gencos invoices in line with their PPAs.

Additionally, they called for the reprioritisation of payments under the waterfall arrangement to give full priority to a 100 per cent payment of Gencos’ invoices as at when due, among other demands.(www.naija247news.com).

Azonuchechi Chukwu
Azonuchechi Chukwuhttps://gravatar.com/azonuchechivchukwu
Azonuchechi Chukwu - Business Journalist at Naija247news.com Azonuchechi Chukwu is a seasoned business journalist contributing to the insightful coverage of economic and financial news at Naija247news.com. With a passion for unraveling the complexities of the business world, Azonuchechi brings a wealth of expertise and dedication to his role. As a Business Journalist, Azonuchechi specializes in providing comprehensive analyses of market trends, corporate developments, and economic indicators. His in-depth reports offer Naija247news.com readers a nuanced understanding of the forces shaping the Nigerian and global business landscapes. Azonuchechi Chukwu's commitment to journalistic excellence is evident in his ability to translate complex financial information into accessible and engaging narratives. Whether exploring stock market fluctuations, corporate strategies, or economic policies, he strives to deliver content that empowers readers with valuable insights. With an educational background in business and a keen interest in the intersection of finance and technology, Azonuchechi stays at the forefront of industry dynamics. His coverage extends beyond traditional financial reporting, encompassing the dynamic realms of fintech, entrepreneurship, and sustainable business practices. Azonuchechi Chukwu's work goes beyond the surface, aiming to foster financial literacy and awareness among Naija247news.com's audience. By demystifying economic complexities and shedding light on emerging opportunities, he plays a pivotal role in keeping readers well-informed in the fast-paced world of business. As Naija247news.com's Business Journalist, Azonuchechi Chukwu continues to make meaningful contributions to the platform's mission of delivering timely, accurate, and relevant business news to its diverse audience. His dedication to journalistic integrity and his ability to navigate the intricacies of the business realm make him an invaluable asset to the Naija247news.com team.

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