SPECIAL and foreign customers failed to remit a total of N64 million and $5.3million to the Federal Government for power purchased, an industry report has revealed.
The Nigerian Bulk Exchange Trading PLC (NBET) and the Market Operator had in the 2021 third quarter, issued N52 million and N12 million invoices to Ajaokuta Steel Company Limited, respectively but the company had remitted nothing.
According to the 2021 third quarter report released by the Nigerian Electricity Regulatory Commission (NERC), during the period, the Market Operator also issued an invoice of $11.52 million to bilateral customers Paras-SBEE, TRANSCORP-SBEE, Mainstream-NIGELEC and Odukpani-CEET but only $6.22 million was remitted.
The report also stated that Ajaokuta had also failed to remit its invoice in 2021 Q2, stressing the need for MO and NBET to activate the safeguards against continued non-settlement of market obligations by market participants.
The report also puts the combined invoice and NBET’s Minimum Remittance Obligation (MRO) adjusted invoice to DisCos in 2021/Q3 at N208.54 billion for energy and administrative services.
Out of this amount, the 11 electricity distribution companies (DisCos) were said to have remitted a total sum of N141.69 billion.
A breakdown of the figures showed that the Market Operator received N41.53 billion while NBET got N100.16 billion representing a remittance performance of 67.94 per cent during the quarter.
The Federal Government, had, as part of the conditions for the several interventions that the CBN has extended to the DisCos, set up an escrow agreement.
Under this arrangement, all DisCos revenues are escrowed, while they only have access to these funds after necessary deductions (VAT payments, repayments of CBN loans, payments to upstream players in the NESI – TCN and NBET) have been made.
This escrow mechanism provides visibility into the financial performance of the DisCos with respect to collections.
In June 2020, the remit of the fund manager responsible for the escrow was expanded to include the implementation of the payment waterfall framework which was designed by NERC to increase upstream market remittance to NBET to cover the cost of energy taken from Generation Companies and MO for transmission and administrative services.
The regulator stated that because prompt payment of upstream market settlements is critical to securing the availability of generation and transmission capacities, the regime pushes DisCos to boost their collections.
“In the absence of cost-reflective tariffs, the government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff shortfall funding.
“This funding is applied on the NBET invoices that are to be paid by DisCos. The amount to be covered by the DisCo is based on the allowed tariff determined by the Commission and set out as their Minimum Remittance Obligation (MRO) in the periodic tariff orders issued by the Commission,” the report stated.
Meanwhile, the Commission in the 2021 Q3 report disclosed that many industrial customers avoided using the grid power supply for production purposes even when available, due to the potential impact of poor quality on their production cycle.
According to the report, industrial customers account for 12 per cent of annual energy sales by DisCos and constitute the highest tariff class as well as the class with the lowest commercial losses.
“To increase the utilisation of grid electricity by industrial customers, the Commission continues to push that the quality of grid supply to them improves by ensuring the grid frequency remains within the statutory bounds.
“In the short/medium term, while the infrastructure investments required to improve the reliability and redundancy of the grid are being done, the Commission will explore options for improved contractual discipline and associated monitoring/evaluation around the quality of energy generated, transported and delivered along the national grid,” it stated.
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The PDP spokesman recalled how the opposition party had on various occasions alerted that the APC government had ceded sovereignty over a large portion of our country to terrorists, “many of whom were imported into our country by the APC.”
He further stated: “From the video, in a brazen manner, terrorists as non-state actors boldly showed their faces, boasting, admitting and confirming their participation in the Kuje Prison break, some of whom were former prison inmates who were either jailed or awaiting trial for their previous terrorism act against our country.
“Nigerians can equally recall the confession by the Governor of Kaduna State, Mallam Nasir el-Rufai that the APC government knows the plans and whereabouts of the terrorists but failed to act.
According to Ologunagba, about 18,000 Nigerians have been killed by terrorists between 2020 and 2022 “as the criminals continue to be emboldened by the failures and obvious complicity of the APC and to which the PDP had always drawn attention.”
“This is not politics; this is about humanity and leadership, which leadership sadly and unfortunately is missing in our country at this time,” he said.
The PDP added that it is appalled by “the lame response by the apparently helpless, clueless and deflated Buhari Presidency, wherein it told an agonizing nation that President Buhari “has done all and even more than what was expected of him as Commander in Chief by way of morale, material and equipment support to the military…”
“This is a direct admission of incapacity and failure by the Buhari Presidency and the APC. At such a time, in other climes, the President directly leads the charge and takes drastic measures to rescue and protect his citizens.
“In time of adversity, the President transmutes into Consoler-in-Chief to give hope and succour to the citizens. Painfully, Nigeria does not have a President who cares and can stand as Consoler-in-Chief to the citizens.
“It has now become very imperative for Nigerians to take note and realize that the only solution to this unfortunate situation is to hold the APC government accountable. We must come together as a people, irrespective of our political, ethnic and religious affiliations to resist the fascist-leaning tendencies of the APC administration.
Ologunagba called for an urgent meeting of the National Council of State to advise on the way to go over the nation’s worsening insecurity.
“Our nation must not fall. The resilient Nigerian spirit and ‘can-do- attitude’ must be rekindled by all to prevail on the President to immediately and without further delay, accede to the demand by the PDP and other well-meaning Nigerians to convene a special session of the National Council of State to find a lasting solution since the President has, in his own admission, come to his wit’s end,” the PDP spokesman declared.
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