By Energy Worth
The Minister of Power, Works and Housing, Mr. Babatunde Fashola, on Monday, disclosed that the indebtedness of power distribution companies, DisCos, to the Nigerian Bulk Electricity Trading Company (NBET), has risen to N859billion.
As a result, the NBET has accumulated a total debt of N325.784billion which is meant for the payment of power produced by electricity generation companies and supplied to the DisCos.
Power distributors collect electricity bills directly from consumers, make payments to NBET and the bulk trader in turn pays the generation companies.
Briefing journalists in Abuja, Fashola said that DisCos had persistently failed to meet their obligation in terms of remittances to the NBET, a development that had grown their indebtedness to the tune of N859bn.
Fashola said, “They (DisCos) are content to allow the government bulk trader pay the GenCo for the power and receive it under the vesting contract which they are not properly performing because they remit only about 15 to 20 per cent of the power they receive, and have accumulated debts of about N859bn (principal and interest) owed to NBET.”
The minister explained that government, during the privatisation of the power sector, took steps to perform its support and enabling role to private sector by setting up the NBET.
“What NBET does is to give confidence to generation companies by guaranteeing to buy bulk power, which is an incentive to GenCos to invest in building more power plants because there is an assured buyer,” he said.
He noted that in real terms, the power that the Discos sell does not belong to them, as they were only distributors for a commission under a vesting contract with NBET.
“All of these arrangements arise from the Electric Power Sector Reform Act of 2005 which led to the privatisation which took place in 2013,” Fashola added.
He stated that the EPSR Act, which regulates the power sector, recognises certain categories of persons who could buy power from a Genco and they include a Disco, NBET and an eligible customer declared by the minister under Section 27 of the Act.
“Interestingly no DisCo is buying power directly from the GenCo for reasons only known to them,” he said.
Fashola also stated that the EPSR Act does not make it mandatory for any Nigerian to receive power only from the DisCo or to use only public power.
He, however, noted that from time to time there could be failures in the system such as gas supply shortage or transmission failures.
The minister said, “This is not the fault of DisCos, but any fair-minded observer will admit that this does not happen every day and this has nothing to do with supply of meters or the proliferation of estimated bills.”
On NBET’s inability to pay GenCos, he stated that this was solely due to DisCos poor remittance to the bulk trader.
Fashola said, “As things stands, my office still receives daily reports by text, e-mails and letters of exorbitant bills by DisCos to consumers without meters, but the remittance by DisCos to NBET is not increasing;
“NBET is also owing the GenCos N325.784bn which can be settled if NBET collects what the Discos are owing. Of course, it is important to point out that some other government institutions are owing the Discos and there are individuals and corporations who are by-passing meters and stealing energy.
“All these point to a situation that can be resolved if everybody does what is right.”
