23 March 2018

Nigeria: DISCOs Claim Manufacturing Firms Over Them N30 Billion

Abuja — The eleven electricity distribution companies (Discos) in Nigeria's power market have alleged that the amount of monies owed them by members of the Manufacturers Association of Nigeria (MAN) as shortfall in the 2015 electricity tariff approved by the Nigerian Electricity Regulatory Commission (NERC) but which MAN refused to accept was about N30 billion.

They said the lawsuit MAN instituted against their application of the tariff had resulted to such accumulation, adding that even discussions on the debts owed them by the Ministries, Departments and Agencies (MDAs) of the federal government which has reportedly been verified, has stalled.

Speaking on Wednesday night at the March edition of the monthly power dialogue of the Nextier Advisory in Abuja, the Chief Commercial Officer, Ibadan Electricity Distribution Company (IBEDC), Mr. Deolu Ijose, explained that such amount of money could be very useful to the Discos and Nigeria's electricity market.

Ijose said on the challenges of the Discos in the market: "There are some other things that probably have gone beyond the control of the Discos. Let me tell you, I attended a meeting yesterday with some members of the Manufacturers Association of Nigeria, and it will interest you to know that MAN went to court when the 2015 MYTO 2.0 came in. And right now, MAN is owing the Discos an average of about N30 billion."

According to him: "And this is because of the court injunction that was slammed on MYTO 2015 that people should continue to pay the old rate. So, the differentials are about N30 billion and those are funds that should be available which probably the value chain should have benefitted from. And if you could approve that one, it will be commendable."

On the MDAs debts, he stated: "Also, I just left a meeting this afternoon where we actually engaged the top brass of the military and others. The truth is the fact that about one month ago the federal government declared part of the 2015 and 2016 debts that were accumulated over a period of three to four years. But as we are talking right now, as at 2017 January going forward, nobody is even discussing it.

"Now, these are some of the liquidities that should have been thrown into the system to cushion all these challenges like metering and others because we need investments to do these things."

MAN had at the declaration of the tariff, rejected its upward review, stating that it was too expensive for its members. It said it would not pay the new rates and instead maintained its payment of the old rates.

Meanwhile, the advisory power team in the office of the Vice President, Prof. Yemi Osinbajo, has disclosed that the shortage of gas supply to power plants in the country has assumed a dominant status.

The team said in the latest generation report sent out that, "gas is currently the dominant constraint," in the sector, adding that its shortage had forced the power generation companies not to generate 1987.5 megawatts (MW) of electricity to the grid.

It explained that as at March 20, power generated to the grid was 4,030MW. It noted that 36.8MW was not generated due to unavailability of transmission infrastructure, and that an estimated N972,000,000 was not earned by the sector due to insufficient gas supply, distribution infrastructure, transmission infrastructure and water reserves.

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