Eight DisCos may lose licences over N27.7bn non-remittance to NBET
Eight Electricity Distribution Companies may lose their licences for non-remittance of over N27.7billion energy invoice to the Nigeria Bulk Electricity Trading Company (NBET) for July 2019 billing cycle.
The Nigerian Electricity Regulatory Commission (NERC), in a notice of intention published on its website and signed by the Commissioner for Legal, Licencing and Compliance, Dave Akpeneye, said the concerned DisCos failed to meet the expected minimum remittance for the month in review.
Out of a total of N35.7billion NBET energy invoice to the eight DisCos, only the sum of N8billion was remitted, leaving a debt of N27.7billion.
It explained that under the Power Sector Recovery Program ( PSRP), DisCos were obligated to settle their market invoices in full as adjusted and netted off by applicable tariff shortfall approved by the commission.
It said that the minimum market remittance threshold for the DisCo was determined after deducting the revenue deficit arising from the tariff shortfall from the aggregate NBET and Market Operator(MO) market invoice.
“The DisCos were availed the opportunity to earn their revenue requirement only upon fully meeting payment obligation; repayment of CBN-NEMS facility,100 per cent settlement of MO market invoices in determining respective invoices prior to this Order.
“Full settlement of a specified percentage of NBET’S monthly being the minimum remittance threshold prescribed in the Order.”
It said the Order was to enable the DisCos to meet their contractual performance obligation to the Nigerian Electricity Supply Industry (NESI) with the recognition of tariff shortfall arising from revenue under-recovery and the exclusion of 2017 and 2018 as years of mutual non-performance In the Performance agreement.
According to the commission, this will enable the DisCos comply with condition 2 of their license terms and conditions which states that;” Licensees shall maintain adequate, financial, technical and managerial resources and capabilities to allow the licensee to carry out the licensed business in accordance with the various rules, codes, regulations and service standards as prescribed by the commission.
NERC noted that DisCos failure to comply with the minimum threshold remittance would no doubt, threaten the sustainability of other parts of the electricity value chain.
In the debt illustration, the AEDC out of N7.2billion NBET invoice, only remitted N2.2billion, BEDC out N4.4billion paid N771.6million, EEDC remitted N400million of N4billion, IE out of N7.3billion remitted N2.9billion, KAEDCO paid N407.7million out of N3.8billion, KEDCO paid N800million of N3.3billion.
Also, PHEDC out of N3.6billion invoice, paid N382million and YEDC only remitted N194.6million out of N1.9billion.
To this end, the commission gave the eight DisCos 60days to prove why their licences should not be withdrawn in two months.