The Nigerian Electricity Regulation Commission (NERC) on says Eko Electricity Distribution Company (EKEDC) recorded the highest remittance efficiency of 43 per cent in the first quarter of 2019.
The Commission also expressed concern on the significant drops in Enugu and Ikeja DisCos’ remittance rate from 34 per cent and 42 per cent in the last quarter of 2018 to 30 per cent and 39 per cent respectively in the first quarter of 2019.
NERC said the liquidity challenge in the Nigerian electricity industry has continued to manifest during the first quarter of 2019.
The report also said that the challenge of poor remittance has remained a serious concern to the commission as it is one of the main causes of the liquidity crisis facing the Nigerian electricity supply industry.
” As highlighted in the preceding quarters, low remittance adversely affects the ability of Nigerian Bulk Electricity Trading (NBET) to honour its financial obligations to GenCos.
“Service providers Transmission Service Provider (TSP), Market Operator (MO) and NERC also struggle with the paucity of funds impacting their capacity to perform their statutory obligations.
“The individual performance indicates that four DisCos recorded an increase in remittance performance in the first quarter of 2019.
” None of the DisCos remitted up to 50 per cent of their market invoice and the aggregate combined invoice settlement rate for all DisCos declined to 28 per cent,” the report said.
On Aggregate Technical, Commercial and Collection (ATC&C) reduction, NERC said EKEDC recorded the highest progress in reducing ATC&C losses, decreasing from 42.2 per cent to 29.8 per cent (12.5 percentage point decrease) in the first quarter of 2019.
It said the average ATC&C for all the DisCos in the first quarter of 2019 increased to 48.72 per cent from 46.96 recorded in the preceding quarter.
“This increase in the overall ATC&C was largely due to the increase in collection losses which increased by 4.2 percentage points during the quarter and still account for the largest share of the aggregate losses.
“Similar to the preceding quarter, the ATC&C losses are still substantially greater than the expected industry average of 26 per cent – the allowable ATC&C losses provided in the Multi-Year Tariff Order ( MYTO) for the year 2019,” the report said
NERC said that the high ATC&C losses reflect low investments in distribution networks aggravated by the low level of metering of end-use customers, thus creating lingering liquidity challenge to the industry.
“The implication of the level of the ATC&C losses in the first quarter of 2019 is that, on average, as much as N4.87 in every N10 worth of energy received by a DisCo was unrecovered.
“This is due to a combination of energy theft, inefficient distribution networks, weak management effort in revenue collection, and low metering and willingness to pay by customers,” it said.
Edited by Oluwole Sogunle
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