Nigeria: NERC's Operating Revenue Increases By 57%

27 October 2020

Abuja — The total revenue accruing to the Nigerian Electricity Regulatory Commission (NERC) increased by 57 per cent in the first quarter of 2020, the power industry regulator, has disclosed.

NERC also stated that the total expenditure of the commission rose to N1.94 billion, from N1.74billion incurred in the preceding quarter, noting that the increase was sourced from operating levies and Internally Generated Revenue (IGR) sources.

The commission, however, noted with concern the low security of supply associated with having just two energy mixes significantly dominated by gas fuel as acts of vandalism of gas pipelines could result in serious grid instability, as experienced in 2016.

"During the first quarter of 2020, the total revenue realised by the commission was N3.25 billion representing an increase of 57.31 per cent from the revenue recorded during the fourth quarter of 2019.

"The reported increase in the revenue was due to the 58.08 per cent increase in the revenue realised from the operating levy (i.e., market charges) and 22.31 per cent increase in other internally generated revenue realised during the first quarter of 2020.

"This indicates that the total expenditure of the commission rose to N1.94billion from N1.74 billion incurred in the preceding quarter. A comparison of the revenue and expenditure of the commission in the quarter under review indicates lesser expenditure incurred when compared to actual cash receipts.

"This shows a positive net cash flow of N1.32 billion. However, the commission still has existing liabilities of N0.23billion as at the end of the first quarter of 2020," NERC stated.

It added: "The operating levy and OIGR which stood at N3.20 billion and N54.50 million respectively in the first quarter of 2020 were respectively 58.08 per cent and 22.31 per cent higher than the amount realised in the preceding quarter."

On the share of electricity generation by fuel sources for the first quarter of 2020 and the fourth quarter of 2019, it disclosed that gas continues to dominate the electricity generation mix accounting for 73.45 per cent of the electricity generated during the first quarter of 2020.

"This implies that approximately 7.35kWh of every 10kWh of electric energy generated in Nigeria in the first quarter of 2020 came from gas. Relative to the preceding quarter, there was 6.43 percentage points decrease in the share of electric energy generated from hydro which accounted for 26.55 per cent of the total energy output.

"The declining share of hydro generation is attributed to low rainfall and water management at the hydropower stations during the quarter.

The Commission notes with concern the low security of supply associated with having just two energy mixes significantly dominated by gas fuel as acts of vandalism of gas pipelines could result in serious grid instability, as experienced in 2016," it added.

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