Tag Archives: Discos

DisCos distributes 93,219 pre-paid meters

 

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Nigerian electricity distribution companies (DisCos) distributed 93,219 prepaid meters between January and March, according to data from the power sector report of National Bureau of Statistics (NBS).

The report said the number of consumers with prepaid meters rose from 1,496,587 at the end of 2017 to 1,589,805 at the end of March 2018.

It showed that Benin Electricity Distribution Company (BEDC) issued 260,667 meters during the first quarter.

Abuja DisCo shared 282,868 meters, while Ibadan DisCo, the largest DisCo, followed by 254,261 prepaid meters to its customers.

Ikeja DisCo metered 157,797 consumers in its franchise area while Eko DisCo issued 158,157 prepaid meters.

In addition, Kaduna DisCo also issued 138,164 prepaid meters as at March 31, while Enugu DisCo had 116,623 of its consumers metered.

It said Port Harcourt DisCo distributed 66,507 meters to its customers; Kano DisCo followed with 63,037 while Jos Disco had 54,395 metered customers.

Discos: We Were Entitled to Only N58bn of CBN’s Power Sector Fund

 

                               Sunday Oduntan

 

 

The electricity distribution companies (Discos) have said the Central Bank of Nigeria (CBN) reserved just about N58.45 billion or 27.75 per cent of its N213 billion power sector intervention fund for the Discos, while the balance went to generation companies (Gencos) and gas suppliers.

The Discos also alleged that despite the federal government verifying and accepting to pay over N72 billion electricity debt accumulated by its Ministries, Departments and Agencies (MDAs), the same MDAs have continued to rack up debts for electricity supplied to them.

They spoke through the Executive Director, Research and Advocacy of their association – the Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, in response to allegations against them by the Minister of Power, Works and Housing, Mr. Babatunde Fashola that the CBN made provisions for financial supports to them, but they blocked its successful implementation with court proceedings.

“The NEMSF (Nigerian Electricity Market Stabilisation Fund) N210.61 billion intervention (this being the amount that is actually going to the designated recipients) has been labelled, interpreted and surrounded with various erroneous and misleading information, especially in relation to Discos.

“The intervention was a vehicle provided by the CBN to ease the beginning of the liquidity crisis that is much worse today. It is not a subsidy or a bailout, but a loan (repayable over a ten-year period) to the sector that is carried on the Discos’ financial books.
“A loan that, substantially, has nothing to do with the Discos, but is on the Disco financial records, for ease of recovery via the tariff,” Oduntan described the loan.

He further said, “specifically, of the N210.61 billion NEMSF amount, N58.45 billion or 27.75 per cent was designated for the Discos; and N152.16 billion or 72.25 per cent was designated for the Gencos, gas suppliers and industry service providers.”
Oduntan, stated that most of the money received by the Discos under the intervention has been transferred to, or committed to banks, as necessary to put cash-backed Letters of Credit (LC) in place as requirement for the vesting contracts the Discos have with the Nigerian Bulk Electricity Trading Plc (NBET).

According to him, “Even though the Discos have no responsibility for, or connection to N152.16 billion of the intervention fund, the Discos’ financial books have been encumbered with this debt.”
He added that, “The debt encumbrance is a significant impediment to the Discos’ ability to borrow money to finance their capital investment and their financing of the entire value chain.”

Specifically responding to Fashola’s claim that some Discos rejected the financial support, Oduntan stated, “We are not aware of any Discos that have sought to reject the NEMSF funds or gone to court to frustrate the disbursement the funds, given that a percentage of the provided funds is legitimately owed by the market to the Discos.

“Perhaps, the minister is referring to the injunction against the attempted backdoor re-nationalisation of the Discos by the NERC and NBET, seeking to escrow Disco revenue accounts, outside of the agreement already reached between the Discos and CBN as a pre-condition for access to the funds.”
He equally alleged that even though the government said it has verified MDAs debts to the Discos, its MDAs were still accumulating monthly electricity debts.

“This assertion of the government’s reconciliation of some of the electricity debts that it owes is troubling in the light of the fact that the government continues to owe Discos for energy that it consumes, and this debt continues to grow, contributing to a market shortfall that is estimated to be in excess of N1.3 trillion on the Discos’ books.

“Whilst the Discos are appreciative of the initial reconciliation associated with the N27 billion but are concerned by the lack of good faith associated with the continued absence of an automatic mechanism for the payment of bills consumed by government MDA.
“Particularly, the absence raises the question of moral leadership of government, in its being a continued large debtor in an environment where Discos are trying to change the culture of non-payment of electricity bills,” he added.

 

 

 

NERC Scrutinises Discos’ Capital Spends Before Tariff Review

 

 

The Nigerian Electricity Regulatory Commission (NERC) would be taking a deeper look at how the 11 electricity distribution companies (Discos) have utilised the capital expenditure allowed for them in their respective existing tariffs before agreeing to sign off a new tariff for them, a quarterly report of the commission has disclosed.

Prepared for the 2017 third-quarter business period, the quarterly report indicated the capital expenditure review would be done to determine how cost-efficient they were with the expenditures they made for capital projects and acquisitions.
The report obtained from the webpage of the NERC, also noted that the efficiency level of billings and revenue collections of the Discos for the period were poor.

It linked the poor revenue collection showing of the Discos to consumers’ apathy to estimated electricity billing; inefficient distribution networks; illegal connection and non-collection of revenue by the Discos’ agents.
“While the government has commenced the implementation of a payment assurance facility for power generators as a means of sustaining generation levels, the commission has accordingly identified in its 2017-2020 strategic plan the actionable items towards addressing constraints in transmission and distribution networks.

“The planned strategy includes a thorough technical assessment of Discos’ utilisation of its capital expenditure allowances for relevance and cost efficiency and a tariff reset in order to stimulate investments in network infrastructure,” the report stated
According to it, “The level of billing efficiency during the third quarter indicates that for every 10kWh of energy received by a Disco from the transmission company, approximately 2.3kWh is lost due to technical constraint and illegal connection.

“In other words, for every N10 worth of electricity received by Discos, N2.30 is lost due to poor distribution infrastructure and energy theft.”
In terms of issues of safety in the country’s electricity network, NERC explained the rate of accidents and deaths by electrocution were still high, and that it initiated about 12 enforcement actions against its licensees in this regards.
“In the third quarter of 2017, the commission received a total of 47 health and safety reports from licensees. The reports indicated that there were 37 accidents during the period under review. The accidents resulted in 25 deaths and 15 injuries of various degrees involving both employees of the companies and third parties,” it stated.

Continuing, the report noted that, “The investigation of the accidents by the commission led to the commencement of twelve enforcement actions against the licensees whose negligence was found to be responsible for or have contributed to the accidents.”
It however warned that, “The commission takes safety of all electricity users and all other Nigerians very seriously and it is concerned about the relatively high number of incidences in NESI.
“Thus, the commission has included in its newly drafted strategic plan various safety enforcement mechanisms and programmes aiming at tackling recurring accidents in the industry.

“Among the safety programmes to be implemented by the commission are the standardisation of protection scheme, engagement of government agencies on Right of Way (RoW) violation, increased public enlightenment on safety, and review of operational procedures for Distribution System Operators (DSOs) on fault clearing,” the regulator added in its quarterly report.