Fashola Calls on Discos to Improve Remittances, Keep Power Sector Afloat


*Discos condemn attempt to criminalise estimated billing

Chineme Okafor in Abuja

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, Monday called on the 11 electricity distribution companies (Discos) in Nigeria’s power sector to improve their monthly remittances to the market and save it from collapsing.

Fashola said this at the April edition of the monthly meeting of power sector operators in Umuahia, Abia State.

According to his address at the meeting, which was sent to THISDAY in Abuja by his senior adviser on communication, Mr. Hakeem Bello, the minister explained that the Discos’ poor revenue payments to the market would eventually affect their businesses, adding that when the Gencos close shop for poor payments, they (Discos) would have no power to sell.

Recently, the remittances of the Discos to the Nigerian Bulk Electricity Trading Plc (NBET) have continued to drop with a few of the Discos actually paying small parts of their monthly bills to the NBET.

For example, in December, NBET disclosed that the Discos paid only N4.47 billion for their invoices which came up to N50.21 billion, as well as N6.08 billion from the N44.85 billion January invoices they got.

“The truth is that if NBET cannot pay her bills to the Gencos, the Discos will have no business because the bulk of their power comes from NBET.

“Therefore, the Discos must, in their own very best interest see NBET as the goose that lays their golden egg, who must not die,” said Fashola.

He further stated in the roles he expected the Discos to take up: “While NBET, TCN and NDPHC act for government to implement its enabling role, the immediate tasks of the Discos, in my view, are to: improve the quality and capacity of the distribution equipment to improve power supply and service to stimulate consumer willingness to pay; improve collection of revenues without extortion through estimated bills or hostility; remit what they collect in accordance with the agreement with NBET; take ownership of the Meter Asset Provider regulations to improve supply of meters; and respond to consumer complaints and resolve them in a business-like manner.”

Fashola also asked NBET to step up its duties in the market. He said: “NBET, on its part, must also improve on the timelines it takes to process payment to the Discos and, in addition, adopt a business orientation of ensuring that it collects as much as it can from the Discos, who help her to retail the bulk power.”

The minister also stated that the Transmission Company of Nigeria (TCN) would in a few weeks, commission over 90 transmission projects as part of its ongoing expansion of the transmission network.

Meanwhile, the Discos have through their umbrella association – the Association of Nigerian Electricity Distributors (ANED) — condemned a proposed bill by the House Leader, Hon. Femi Gbajabiamila (APC Lagos), to criminalise estimated electricity billing in the country.

ANED said the proposal was not in tune with the needs of the power sector and should be ignored.

Its Director of Advocacy, Mr. Sunday Oduntan, said in a telephone interview that estimated billing was not a bad practice but that its accuracy was in contention in Nigeria. He added that the new third-party meter regulation by the NERC could render Gbajabiamila’s bill irrelevant.

“With due respect to Hon. Gbajabiamila, who was said to have moved for that amendment, if you criminalise estimated bills, it is as good as saying all Discos should pack and go.

“Estimated billing is not strange even in developed countries, people who have no meters are estimated. The contention in Nigeria is the accuracy of the estimation, and we have had cases of overbilling otherwise known as crazy billing, as well as under billing. Either of the two are not good enough,” said Oduntan.

He further stated: “The regulator established the guideline and calculations for estimated billing, when somebody wakes up and say it is now criminal to estimate bills, then it is as good as saying: “disconnect them permanently from the grid until they are metered.” People also have a right to contest their estimated bills.”

“We don’t think that is the right way to go, we don’t think that will help the sector, we expect the honourable member to align with NERC, and also follow up with the latest MAP regulation which is a roadmap towards metering our customers. While not wait and let us see how it works instead of coming up with that proposal.

“We should not just come up with laws, we should look at the purpose of what we want to achieve. We advise the House to think about what is best for Nigeria because to kill an ant does not require a sledge hammer.”