…an average of 2,448.50 megawatts every month stranded
…Discos indebtedness to other partners hits N326bn In Nine Months
Olusola Bello
Power generation companies lost about N120.25 billion to stranded power which averaged 2,448.50 megawatts every month in 2021.
According to an industry data cited by BusinessStandards, an average of N13 billion was lost every month by generating companies.
This is the total monetary value of the volume of electricity generated by generating companies but which unfortunately could not get to consumers either due to infrastructural problems or because they were rejected by distribution companies for fear of not being able to recover the money from consumers.
An industry analyst described this situation as a colossal waste of monetary and human resources. He said this development would send away any potential investor in the power sector.
The data titled: “2021 generation capacity Loss data,” indicated that available generation capacity every month was 6,336.52mw, while average generation was 4,118.98mw on monthly basis.
The highest available generation capacity was recorded in September and it was 7,092.21mw, unfortunately in that same month it recorded 3,801.46 mw as available capacity. This translated to a loss of N19.31 billion. The following month which was August, N17.64 billion was lost because of stranded power of 2,909mw was recorded.
June 2021 recorded the least available generation capacity of 5,970.49mw while average daily generation stood at 3,694.46mw with the attendant loss of revenue to the tune of N14.07 billion.
Meanwhile, the shortfall in remittances by power distributors to the Nigerian Bulk Electricity Trading Company Plc and the Market Operator of the sector rose to N326bn between January and September 2021, the Federal Government has said.
The available data on remittances to the sector by the distribution companies also cited from a Federal Government agency showed that the 11 Discos failed to remit N287.8bn to NBET during the period.
Also, the power distributors could not remit N38.31bn to the Market Operator in the same period, bringing their cumulative indebtedness to the sector to precisely N325.9bn, according to figures released by the Nigerian Electricity Regulatory Commission.
The NBET is an agency of the Federal Government that buys electricity in bulk from generation companies through power purchase agreements, and sells it through vesting contracts to distribution companies, which supply to end-users.
The Market Operator, an arm of the Transmission Company of Nigeria, is also a Federal Government agency and functions as the administrator/operator of the Nigerian electricity market.
It was learnt that an invoice of N612.26bn was issued by NBET to the 11 Discos as their bill for nine months, but the power firms remitted N324.46bn, leaving a shortfall of N287.8bn.
NERC outlined the 11 power distributors to include Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt and Yola.
On their remittances to the MO, NERC stated that the total invoice issued by the Market Operator to the 11 Discos during the review period was N159.79bn.
The Discos, according to the power sector regulator, however, remitted N121.48bn, leaving a shortfall N38.31bn.
Power generators and other market participants had often complained about the failure of Discos to remit the complete amount issued to them by both NBET and MO.
According to the Gencos and other industry players, the failure of the Discos to make complete remittances has caused some financial strain in the country’s power business.
But the Discos on their part, had been complaining of the failure of some end-users to pay their electricity bills, particularly the ministries, departments and agencies of the Federal Government.
Providing an instance, the Discos stated that the unpaid electricity bills of the ministries, departments and agencies of the Federal Government, including military and para-military organisations had exceeded N90bn.
The Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Sunday Oduntan, was quoted to have said recently that the indebtedness of the MDAs had lingered and that the unpaid bills had been increasing since November 2013.
He said, “All MDAs’ debt is in excess of N90bn and the military is part of that. We came onboard in 2013 and since then, how much has been paid by the MDAs?
“There was a time when a former minister of power said they (government) had concluded arrangement on how to settle the debt, but as I speak with you, the bills are still there unpaid. Since privatisation, there have been issues around MDAs debt.”
