Eleven power distribution companies have lost over N1.4tn in revenue to the non-payment of electricity bills by Nigerians and consumers in Benin, Niger and Togo.
In Nigeria, many customers supplied electricity by the Discos are issued invoices based on meter bands and the number of hours supplied every 30 days, while others with prepaid meters load prepaid power units onto their meters.
Data from quarterly reports and Discos energy sales records published by the Nigerian Electricity Regulatory Commission from 2019 to 2022 showed that out of the N4.30tn billed customers, only N2.92tn was reimbursed to the companies.
This represents a collection efficiency of over 55 per cent, whereas the Discos are heavily indebted to local banks.
As of August 2022, the Discos were unable to pay the N2tn debt owed the power generation companies.
Last week, the Market Operator, a division of the Transmission Company of Nigeria, disconnected the Kano Electricity Distribution Company, Kaduna Electric and APLE Electric from the national grid for failing to settle their debts, thereby throwing customers in their franchise areas into darkness for days.
The affected Discos were, however, reconnected on Monday, May 1, 2023 following the intervention of the Minister of Power, Mr Abubakar Aliyu.
They were subsequently given 60 days to settle their outstanding invoices.
A breakdown showed that the Discos billed Nigerians N690.2bn in 2018, N730.88bn in 2019, N816.16bn in 2020, N1.1tn in 2021 and N840.18bn in 2022.
However, revenue receipts showed that N442.3bn was collected in 2018; N483.65 in 2019; N542.73bn in 2020; N771.3bn in 2021; and N596.63bn in three quarters OF 2022.
Benin, Togo, Niger owe N22.55bn
Findings indicate that neighbouring customers are also indebted to the Nigerian power distribution firms to the tune of N22.55bn for unremitted payment for electricity supplied in five years.
NERC pointed out that the power firms were indebted to the Nigerian Bulk Electricity Trading Company Plc and the power market operator.
Under an international treaty, Nigeria sells electricity to neighbouring countries like Benin Republic, Togo and Niger Republic through Paras-SBEE, Transcorp-SBEE and Mainstream-NIGERLEC, respectively.
Data gathered showed that an invoice of N50.01bn was sent to the firms in 2018; N30.03bn in 2019; N16.22bn in 2020; N7.67bn in 2021 and N4.66bn in 2022.
While N9.62bn was received as revenue in 2018; N56.94bn was collected in 2019; N12.06bn in 2022; N2.9bn in 2021 and N4.62bn in 2022.
However, the commission did not specify the number of megawatts supplied to the countries in the same period.
Explaining reasons for the non-remittance of revenue by the bilateral consumers, the commission stated in the report, “The Nigerian government has continued to engage governments of neighbouring countries benefiting from the export supply to ensure timely payment for the electricity purchased from Nigeria.”
Experts’ opinions
Reacting to the development, the Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Sunday Oduntan, urged customers to pay up their bills, stressing that the debts were affecting the viability of the power sector.
He said, “As Discos, we implore everyone to pay their debts so that we can also pay what we owe the market.
“We are electricity distributors and the industry’s collection agents. Anytime a customer defaults in paying the bill, it affects our ability to pay the generation companies. It is a value chain and every action or inaction affects our sustainability.”
Oduntan added that the association was intensifying efforts through collaboration as high debts had diminished the sustainability of the sector in a way that was impacting businesses, paying of salaries, and meeting contractual obligations.
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