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HomeGeneral InterestCOVID-19 affected DisCos’ collection efficiency, remittance in Q1 2020 – NERC

COVID-19 affected DisCos’ collection efficiency, remittance in Q1 2020 – NERC

By Solomon Asowata

Lagos, Oct. 27, 2020 The Nigerian Electricity Regulatory Commission (NERC) on Tuesday said that the COVID-19 pandemic affected collection efficiency and remittance by the 11 Electricity Distribution Companies (DisCos) in the first quarter of 2020.

NERC made this known in the First Quarter Report 2020 which was obtained by Naija247news in Lagos from the website of the electricity regulatory agency.

The commission said out of the combined invoices of N185.08 billion for energy and administrative services received from Nigerian Bulk Electricity Trading (NBET) and Market Operators, only a total of N60.20 billion (representing 32.53 per cent) of the invoice was settled.

It said this created a total deficit of N124.88 billion (including tariff shortfall).

NERC said: ”The commission notes with concern the impact of COVID-19 pandemic on collection efficiency, DisCos’ remittance to the market and its attendant impact on the liquidity challenges in the Nigerian Electricity Supply Industry (NESI).

“Low remittance adversely affects the ability of NBET to honour its financial obligations to Electricity Generation Companies (GenCos).”

The commission said service providers such as Market Operators and NERC also struggle with the paucity of funds impacting their capacity to perform their statutory obligations due to the low remittance.

It said the individual remittance performance indicated that only Jos and Enugu DisCos recorded a slight increase in their remittance performance in the first quarter of 2020.

The commission said: “The aggregate combined invoice settlement rate for all DisCos fell to 32.53 per cent.

” Ikeja DisCo, though underperformed in its remittance as compared to 2019/Q4, recorded the highest remittance rate of 43.92 per cent during 2020/Q1 while Kaduna DisCo recorded the lowest remittance rate of 14.16 per cent during the same period.”

NERC said all DisCos were therefore being steered continually to rapidly improve on their revenue collection from customers in order to fulfill their remittance obligations and mitigate financial distress in NESI.

The commission added that it had written to NBET to exercise her contractual right on the payment security cover provided by DisCos in order enforce payment discipline and compliance with the minimum remittance.

Naija247news, Nigeria
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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