Nigeria’s electricity distribution companies have served disconnection notices to defaulting ministries, agencies and departments of the Federal Government, residential, industrial, and commercial customers who owe them over N105bn.
The debt, the discos say, is crippling their capacity to meet their obligations to the generation and transmission companies, pay staff and operating cost, acquire gas for turbines and repair broken power distribution infrastructure, thereby threatening to bring down the entire electricity value chain.
The disconnection notices came by way of adverts in a number of national dailies.
“Since November 2013, Portharcourt Electricity Distribution Company (PHED) has supplied 4 billion kilowatt hours to customers. Sadly only 55% of this power has been paid for. More than N36billion has been lost due to non-payments,” said Jay McCoskey, chief executive of Port Harcourt Distribution Company in a notice published in the media.
“This is money needed to pay for gas supply, power generation and transmission to make electricity available to our customers. Only if all electricity supplied is paid for will the power sector survive,” McCoskey said.
The updated debt profile made available to BusinessDay by Sunday Oduntan, executive director, research and advocacy, Association of Nigerian Electricity Distributors (ANED), shows that the combined debt of government MDAs and the military stood at N105,519,595,167.90.
Nigerian Army led the pack with a debt of N38.755billion owed 11 distribution companies. The Nigerian Air Force owes the discos N3.092billion while the Nigerian Navy owes N3.298billion
Government ministries and departments owe the 11 distribution companies a combined total of N56.373 billion. The document also indicated that the ministry of power, works and housing too owes N503.18 million. All the figures are for before and after privatisation.
Oduntan had last month alluded to a problem with collection, “The practice of the Nigerian military beating up our distribution staff is totally unacceptable and it has to stop. We are calling on the president who himself is a retired general and was a top military officer to please call his boys to order.
“This has to do with the recent acts of the Nigerian military in the Artillery Brigade in Ogun State. On March 6, 2016, at about 10:56a.m., one Major Musa led other soldiers from the Alamala Barracks in Abeokuta to a substation and beat up, Mr. Salau, the man on duty,” he said.
Babatunde Fashola, minister for power, works and housing, at a recent public lecture on the roadmap of the government to resolve electricity challenges stated that the discos who Nigerians are wont to hold responsible for power shortages, only get 25% of tariff paid on power.
BusinessDay checks reveal that of the bulk of consumer tariff, 60 percent goes to generation companies, 11 percent to the Transmission Company of Nigeria and 4 percent to other stakeholders, including the Nigerian Regulatory Commission (NERC).
Payment received by the distribution companies is shared in this proportion and a debt to discos means they cannot pay for power bought from generation companies. This will in turn reduce the capacity to generate, transmit and distribute power.
A source contacted at NERC to speak on what they are doing to assist in debt recovery, told BusinessDay, “We are aware of these challenges and we are working to assist the discos by writing to government MDAs to settle their obligations. We are not just keeping quiet over the issue.”
Oduntan confirmed that NERC was engaged in such efforts at assistance.
ISAAC ANYAOGU
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