Discos groan under N300bn revenue shortfall
Ejiofor Alike in Lagos and Chineme Okafor in Abuja
The total amount of power available to the Transmission Company of Nigeria (TCN) to distribute to home and offices across Nigeria has dropped to 1,400 megawatts(MW).
The System Operation/ Market Operation Department of the TCN stated this yesterday in a statement from its Assistant General Manager, Public Affairs, Mr. Clement Ezeolisah, in Abuja.
Ezeolisah stated that electricity generation into the national grid dropped to 1,400MW as at Tuesday, May 17, 2016 because of operational challenges experienced by gas power generation companies in the country.
He said the drop in electricity generation was due to constraints in the thermal power stations which have prevented the generators from producing at optimal levels.
He did not disclose nature of these challenges but THISDAY understands that it is not unconnected to the dip in gas supply to the plants.
Key pipelines conveying gas to power plants in the south have been vandalised and are undergoing repairs which the government said will be completed within the last weeks of May.
However, Ezeolisah said that all stakeholders in the power sector were working assiduously to achieve improvements in the system.
He said TCN expressed regret over the attendant inconvenience the low power generation has caused to homes and businesses in the country.
Meanwhile, the 11 electricity distribution companies have deplored the increasing revenue shortfall in the power sector, saying the liquidity crisis is threatening to undermine the electricity value chain and the ability of the operators to continue to serve their customers.
In a World Press Conference organised yesterday in Lagos, the Discos under the auspices of the Association of Nigerian Electricity Distributors (ANED), noted that despite the liquidity challenges, they have deployed 3,283,402 meters to customers in the last two years, thus reducing the metering gap in the country to 2.8 million.
Speaking at the conference, which was attended by the Chief Operating Officer (COO) of Ikeja Electric, Mr. Anthony Youdeowei, Managing Director of Abuja Electricity Distribution Company, Mr. Neil F. Croucher and his counterpart in Ibadan Electricity Distribution Company, Mr. John Donnachie, the Executive Director of ANED, Mr. Sunday Odutan said the revenue shortfalls had affected the ability of the companies to make capital investments in metering, network expansion, equipment rehabilitation and replacement.
“Industry shortfall is massive and growing, now about N300 billion. This is a cash liquidity crisis that threatens to completely undermine the electricity value chain and its ability to continue to serve its consumers,” Odutan said.
He identified gas pipeline vandalism as the major cause of low electricity generation, saying this has denied customers the needed power supply and also prevented the distribution companies from collecting sufficient revenues to maintain and improve their networks.
“Gas pipeline vandalism leads to shortage of gas to power stations; shortage of gas leads to low generation. Low generation and poor transmission facilities lead to low distribution. Therefore, discos are not to blame for poor power supply. We cannot give what we don’t have,” Odutan added.
Odutan also identified theft of electricity, debts owed by ministries, departments and agencies (MDAs) and lack of access to foreign exchange as some of the serious challenges facing the Discos.
He revealed that some customers bypass meters and connect themselves illegally, adding that the electricity industry cannot survive with the present level of theft in the sector.
According to him, MDAs debts plus interest now stands at N93 billion, which is yet to be paid.
“The ability of the industry to meet its service delivery obligations is severely constrained by the lack of access to foreign exchange,” he added.
He said despite these challenges, the Discos had provided 3,283,402 meters to customers, thus bridging the metering gap to 2.8 million.
According to him, the companies have also embarked on internal restructuring and streamlining of operational costs to make them run more efficiently.
Odutan said the operators had also initiated improved meter rollout strategies at the customer level and the interface trading points, stressing that the Discos are getting better, accounting for the energy they receive, which will lead to reasonable estimated bills.
To address the challenges in the industry, Odutan said the federal government should honour the terms of the privatisation and also maintain consistency in regulations to ensure commercial viability of the sector.
He also stressed the need for the Discos to be allowed access to foreign exchange.