Chairman of NERC, Dr. Sam Amadi
Chineme Okafor in Abuja
The seeming failure of successor distribution companies carved out of the Power Holding Company of Nigeria (PHCN) to show some level of financial prudency in their revenue collection, may have led to the reluctance of the Nigerian Bulk Electricity Trading Company (NBET) Plc to sign a vesting contract with any of them, THISDAY has learnt.
Checks by THISDAY revealed that NBET, which is also referred to as the ‘Bulk Trader’ has yet to sign any vesting contract with PHCN discos fearing that money expended by it to purchase electricity from generating companies may not be paid back to it by the discos whose revenue collection rate has remained low in spite of an operational cost-reflective tariff in the sector.
Top officials at both NBET and Nigerian Electricity Regulatory Commission (NERC) told THISDAY that the bulk trader is more or less standing on the fence and has refused to commit any vesting contract with the discos. The sources explained that the existence of considerable gap in revenue collection of the discos has remained a source of worry to the Bulk Trader, adding that the discos have shown very little financial discipline in their collection rates.
“Do you know that we still have deficits in revenue collected by the Discos? They are yet to close up these gaps and monthly they do not meet up with their financial obligations irrespective of the cost-reflective tariff that has been initiated by NERC.
“The Bulk Trader will not sign a vesting contract with any the discos for now because they have not given it reasons to do that; I think it is pertinent to note that even if NERC raises the tariff to N100 per kilowatt or there about, the discos will still not meet up with their obligations as long as they remain financially indiscipline, there has to be measures to block existing loopholes and make them improve on their collection rates otherwise it will remain the same way,” one of the sources explained.
Chairman of NERC, Dr. Sam Amadi, had disclosed last week that poor consumer service delivery practices amongst PHCN discos have been a clog in the operational wheel of the new cost-reflective tariff in Nigeria’s Electricity Supply Industry (NESI).
Amadi, who condemned the poor practices of the discos, noted that the Commission has in the last couple of months that it launched the Multi Year Tariff Order 2 (MYTO-2) in June received high volume of complaints from electricity consumers for poor service delivery from PHCN distribution companies.
He said: “One of the real crises of this sector is lack of customer-centric by utilities; we have received several reports, people are not happy with the tariff not because it is high but they are yet to enjoy good service delivery.
“They are complaining about bad billing system even though we have rolled out a methodology to sanitise estimated billing but the billing is still going on and people are complaining,” he added.
According to the content of a vesting contract document prepared and certified by NERC for NESI, the vesting contract will in essence allow each disco some share of every generated power until the time distribution companies are able to independently contract power; the Bulk Trader is expected to act as an intermediate between the discos and generation companies, the document provides that a disco that defaults in its rate of revenue collection may have lesser power allocated to it in the emerging power sector.