Power investors condemn FG’s plans to escrow DisCos’ accounts

THE eleven electricity distribution firms have condemned alleged plans by the Federal Government to escrow and centralise their revenue accounts over poor market performance on their monthly remittances.

They said such move would be a nationalisation of the 11 Distribution Companies (DisCos), privatised just three years ago.

The Nigerian Bulk Electricity Trading Plc (NBET) had repeatedly published that the DisCos remitted only 30 per cent of their monthly energy invoices last year.

Also, the Executive Managing Director of the Market Operator (MO), an arm of the Transmission Company of Nigeria (TCN), Mr Moshood Saleeman, had in October 2016 at a market participants’ workshop in Abuja said if the poor collection continued, the DisCos’ revenue accounts may be escrowed.

The Director of Research and Advocacy, Barrister Sunday Oduntan, Association of Nigerian Electricity Distributors (ANED) in a statement issued on Monday in Abuja said, “Any attempt to centralise or escrow the DisCos’ revenue accounts would be tantamount to nationalisation or expropriation of the DisCos.”

He said such action runs counter to the objectives of the National Electricity Power Policy, 2001 (NEPP) and the Electric Power Sector Reform Act, 2005 (EPSRA), of a private sector-owned and managed electricity sector.

“It would also send very wrong signals to domestic and international investors that Nigeria is not fully open for private sector investment and that we are still partial to the old habits of nationalisation, preventing the injection of the cheap and sorely needed capital injection that is critical to the rehabilitation and improvement of electricity infrastructure,” Oduntan explained.

He said it will be improper to have a, supposedly, private sector-owned and managed business in which the government now seizes control of its revenues.

ANED advised the Federal Government to avoid any consideration of regulations or action that intrudes on the corporate responsibilities of procurement, financial management or personnel management.

“Relative to procurement, we are not aware that Nigerian Communications Commission (NCC) issues regulations to guide the internal procurements of the telecommunication companies; Central Bank of Nigeria (CBN) that of the banks; or the Department of Petroleum Resources (DPR), that of the oil companies,” he said.

The power investors also said they learnt government is mulling the decision to call for the declaration of eligible customers for the electricity market.

Oduntan in the statement said such can be declared by the minister only when “when a competitive market exists in the Nigerian Electricity Supply Industry (NESI).”

ANED said such competitive market, driven by efficiency, presence and utilisation of industry contracts does not exist now. It said the minister under Section 27 of the EPSRA 2005, has authority to determine “end-use customers’ that then constitutes eligible customers.

The investors however said Section 28 of the Act requires that the DisCos must be compensated for any reduction in their ability to “earn permitted rates of return on their assets” or any inadequacy in their revenues, as a result of such determination.

They warned that any such act will have an effect on consumers. “What this means is that consumers will have to suffer an increase in their electricity tariff, to accommodate this premature declaration of eligible customers.”