DisCos fail to remit N236.5 billion
• CBN moves to address liquidity crisis
Amid moves by the Central Bank of Nigeria (CBN), to instil discipline in the Nigerian Electricity Supply Industry (NESI), consumers in the first five months of the year consumed about N293 billion worth of electricity, even as the distribution companies (DisCos) failed to remit N236.5 billion.
Although the Nigerian Electricity Regulatory Commission (NERC), had compelled the DisCos to meet a minimum remittance of at least 35 per cent, the Nigerian Bulk Electricity Trading Company (NBET), disclosed that the DisCos had failed to meet the threshold.
This comes as the CBN, in a statement, warned that commercial banks providing payment guarantees for the DisCos would be held responsible for collections and remittances to NBET and TCN.
The apex bank had, in a circular signed by its Director of Banking Supervision, Bello Hassan, said: “The payment or settlement of all NESI related goods or services shall be made through the Nigerian banking system.
“Consequently, all collections for the payments of NESI regulated goods and services provided by a DisCo shall be paid into a designated account such that collections arising from services rendered by the DisCo shall be paid into an account in the sole name of the DisCo; collections arising from services rendered by a third party/parties on behalf of the DisCo shall be paid into an account in the joint name of the DisCo and the third-party vendor(s).
“All energy and non-energy collections of DisCos, whether cash or cashless, shall only be performed by deposit money banks (DMBs). No entity shall be permitted to collect revenues for DisCos except if that entity is so authorised by a DMB in line with the relevant CBN guidelines for agent banking and agent banking relationships,” the circular stated in part.”
The collection and remittance of electricity tariff have remained a challenge as the 11 DisCos are unable to meet the new minimum payment threshold set by NERC as prerequisite for tariff increases.
In its latest minor review of the Multi-Year Tariff Order (MYTO), the Commission had mandated DisCos to make 100 per cent remittances to market operators, repay CBN loans and, depending on the Disco, remit a stipulated percentage of NBET’s monthly invoices.
But the DisCos had countered NERC, and sought lawmakers’ intervention, insisting that they would need about N8.7billion to comply with the remittance order.
Executive Director, Research and Advocacy at the Association of Nigeria Electricity Distributor (ANED), Sunday Oduntan, had specifically noted that the DisCos would require about N725 million monthly to meet the threshold of the 35 percent remittance level set by NERC.
In the first five month of this year, the DisCos couldn’t remit about N236.5billion of the N293 billion worth of energy supplied to them by the NBET.
In January, while the total invoices of the energy consumed stood at N52.2billion, the DisCos only remitted N14.9 billion, a paltry 29 per cent of the energy supplied to them for the month.
The problem was worse in February, as the DisCos paid N13.1 billion of the N52.1 billion-worth or 25 per cent of energy received.
March was even weaker, as the companies remitted only 11 per cent, being N5.8 billion of the N52.6 billion worth electricity supplied.
The situation improved a little in April, as the firms received energy worth N68.1 billion but remitted about N10.6 billion, or 16 per cent of the total amount of energy received. While Eko remitted the highest – about N2.5 billion or 33 per cent of the N7.8 billion worth of energy it received, Kaduna and Kano DisCos took the flak for zero remittance. In May, the invoice for energy sent to the 11 DisCos stood at N68 billion, the utility companies however remitted only N12.3 billion, which translated to 18 per cent of the total amount. Again, Eko remitted the highest of N2.7 billion (35 per cent) of the N7.9billion energy, while Kaduna and Kano DisCos failed to make any remittance, according to NBET statistics.
NERC, in effort to increase electricity tariff and make the sector self-funded, set remittance thresholds, and some DisCos were asked to pay as low as nine per cent. The highest was 50 per cent. But most of the utility firms have not met the threshold.