Connect with us

Energy

FG reports DisCos’ failure to remit N208bn in 2022

Published

on

The failure of Nigerian power distribution companies (Discos) to make complete remittances in 2022 has been revealed in the latest quarterly report from the Nigerian Electricity Regulatory Commission. It showed that a total of N208.8 billion was not remitted to the Nigeria Electricity Supply Industry throughout the year.

These Discos are responsible for distributing electricity to consumers in their respective franchise areas of operation. The 11 Discos are Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt, and Yola. Despite efforts made in 2013 to improve the efficiency and reliability of electricity supply across Nigeria, the Discos never made a complete remittance throughout 2022.

This development is undoubtedly a setback to efforts made by the Nigerian Government to improve the country’s power sector through various reforms over the years. Electric power remains a major concern in Nigeria with several factors such as transmission constraints, inadequate gas supply, and distribution challenges affecting the power sector. Reports have shown that a large percentage of the population has no access to stable power supply, making it difficult to develop critical sectors of the economy.

It remains to be seen how the Nigerian Government would address this issue and hold the Discos accountable for their actions. Nevertheless, immediate action is required to provide adequate power to the people, especially those in rural areas, where access to electricity is a matter of life and death.

The Discos are responsible for collecting electricity bills from consumers and remitting the funds to the power market through the Nigerian Bulk Electricity Trading (NBET) Plc and the Market Operator (MO). However, according to the Nigerian Electricity Regulatory Commission’s figures, the Discos failed to remit N208.8 billion in 2022, including N49.23 billion, N31.3 billion, N58.3 billion, and N69.94 billion in the fourth, third, second, and first quarters, respectively.

Advertisement

The NERC’s Fourth Quarter Report presented that the Discos were billed a total of N231.01 billion, comprising generation costs from the Nigerian Bulk Electricity Trading Company (N188.74bn) and transmission and administrative services from the Market Operator (N42.27bn). The Discos’ total remittance of this amount was N181.78 billion (N145.91bn for NBET and N35.87bn for MO), leaving an unpaid balance of N49.23 billion.

Given that remitting these funds is a crucial obligation of the Discos, this shortfall presents a significant challenge for the Nigerian Electricity Supply Industry’s development. Also, this shortfall is a reminder of the critical need for Nigeria’s power sector to undergo a radical overhaul of the current systems and operations. Urgent measures are required to ensure the adequate supply of electricity, particularly in rural areas.

The Nigerian Electricity Regulatory Commission has linked poor remittance by the Discos to higher technical, commercial, and collection losses than allowed. The commission stated in its report that the Discos’ failure to make timely and complete remittances has become more common due to these losses, which are eroding their bottom line.

The NERC noted that during the third quarter of 2022, the Discos breached the rules by failing to pay the allowed remittance due to the Nigerian Electricity Supply Industry. The commission disclosed that the Discos owed a total of ₦31.29bn from a combined invoice of ₦204.84bn, which was billed for generation costs from the Nigerian Bulk Electricity Trading Company (NBET), and transmission and administrative expenses from the Market Operator (MO).

In the second quarter of 2022, the combined invoices from the NBET and MO to the Discos were ₦185.01bn, divided into generation costs of N149.89bn and transmission and administrative expenditure of N35.12bn. The Discos made a total remittance of ₦156.71bn (N126.3bn for NBET and N30.41bn for MO), leaving an unpaid balance of ₦28.3bn.

Advertisement

These persistent remittance shortfalls bust Nigeria’s efforts to transform its power sector, which has been hampered by insufficient investments, operational inefficiencies, and inadequate regulation. Ensuring that the Discos submit their funds as needed will significantly boost the sector and attract foreign investment.

According to data from the Nigerian Electricity Regulatory Commission, the combined invoices issued to the Discos for the second quarter of 2022 amounted to N175.01bn, with generation costs from the Nigerian Bulk Electricity Trading Company accounting for N142.4bn and administrative/transmission expenses from the Market Operator accounting for the remaining N32.61bn. The Discos remitted a total of N126.69bn (N102.35bn for NBET and N24.34bn for MO) but still owe N58.32bn.

Regarding Q1, 2022 market remittance, the combined invoice issued to the Discos amounted to N205.63bn, comprising generation costs of N164.86bn and transmission/administration services of N40.77bn. The Discos remitted a total of N135.69bn (N109.96bn for NBET and N25.73bn for MO) but owe N69.94bn.

The Commission’s report shows that the Nigerian power sector struggles with a liquidity crisis exacerbated by the power distribution companies’ poor remittances since the industry’s privatisation in 2013. As per the report, power distribution companies’ higher than allowed technical, commercial, and collection losses directly contribute to the Discos’ reduced financial capabilities, leading to inadequate payment to the Nigerian electricity supply industry.

“The Discos’ outstanding debt poses a major challenge to the realization of the government’s efforts to improve electricity supply across the country. Therefore, the Discos must prioritize and improve their operational efficiency and remittances to enable the power sector to meet the increasing demand for electricity,” says an industry analyst.

Advertisement

A significant remittance shortfall presents a significant obstacle to the Nigerian power sector’s progress. There is an urgent need for the Nigerian Government to guarantee the efficient operation of the power sector by increasing investment, implementing better regulation, and ensuring that the DisCos fulfill their obligations for an adequate supply of electricity.

The President of the Nigeria Consumer Protection Network and Coordinator of Power Sector Perspectives, Kunle Olubiyo, has called on the new government led by President Bola Tinubu to take a comprehensive approach to the Nigerian power sector. According to him, there is a need to review the privatisation of the successor distribution and generation companies of the defunct Power Holding Company of Nigeria in November 2013.

It is essential to review the privatisation due to the poor performance of the power distributors since privatisation, he added. He also stated that the 10-year moratorium on power sector privatisation would end in October this year. He advised that the authorities should tread carefully to prevent litigation since the period has been granted to privatised companies.

Olubiyo said, “It is essential to understand the sector’s complex value chain before reviewing the privatisation.” He suggested that, in addition to reviewing the privatisation, a national power supply coverage goal should be established to incentivise private investors and improve power distribution.

A holistic approach would be required to address the power sector’s challenges successfully. It is critical for the Nigerian government to work collaboratively with stakeholders and create enabling policies to attract direct private investment into the power sector.

Advertisement

The Director-General of the Nigerian Electricity Liability Management Company, Adebayo Fagbemi, praised the involvement of banks in the power sector’s day-to-day operations, noting that the presence of banks had curbed the unprecedented impunity in the power sector. He emphasised that the absence of regulatory policy surrounding the power sector had made it difficult for the industry to progress, making the involvement of banks essential.

Fagbemi expressed concern about those who exploit the power sector for their gain. He cited the example that some people earn N15bn monthly and still withhold necessary remittances for services rendered. The absence of enforcement had contributed to a culture of impunity in the power sector, according to Fagbemi. He believes that without banks’ involvement, it would be impossible to curtail corruption in the power sector.

The Nigerian Electricity Supply Industry has struggled with a liquidity crisis, particularly as a result of the Discos’ inadequate remittances since the sector’s privatisation. For the Nigerian power sector to progress, regulatory policies must be enforced. In addition, direct investment by banks, coupled with regulatory enforcement, may be the solution to strengthening the power sector and increasing access to electricity in the country.

Energy

Gas Leaks at Rivers AGG Facilities Trigger Power Shortage in Aba

Published

on

By

A gas leak and a process upset at the Associated Gas Gathering (AGG) facilities near Port Harcourt, Rivers State, have significantly disrupted electricity supply in the Aba Ring-fenced Area, which covers nine of the 17 local government areas in Abia State.

Sources familiar with the situation, who requested anonymity as they are not authorized to speak to the press, revealed that the incidents occurred at the AGG installations in Obigbo and Agbada, both located on the outskirts of the Rivers State capital.

“The incidents are at Obigbo near Port Harcourt and at Agbada which is between Port Harcourt city and the airport,” stated one of the sources, an engineer with the NNPC Marketing Limited (NGML). He further explained that while the process upset at Obigbo had been identified earlier, “it does not seem as serious as that of Agbada.”

Engineer Vincent Chukwueke, a seasoned gas expert and former top executive at The Shell Petroleum Development Company (SPDC), said that the incidents likely prompted Heirs Energies, the operator of Oil Mining Lease (OML) 17, to suspend gas supply for safety reasons. The affected gas feeds the 188MW Geometric Power Plant in the Osisioma Industrial Layout, Abia State, which supplies electricity to Aba Power for distribution across the Aba Ring-fenced Area.

“It had to suspend gas supplies so as to quickly resolve the issues at the AGGs,” Chukwueke said on Saturday.

Speaking with our correspondent by phone, Aba Power Managing Director, Ugo Opiegbe, confirmed that the company “has been constrained to make do with only 25MW from the Niger Delta Power Holding Company (NDPHC) since yesterday when the supply from the embedded power plant was ceased.”

“The supply from the NDPHC is a fraction of what we can generate from our three turbines, as each produces 47MW,” he added.

While regretting that the electricity shortfall occurred during the Easter holidays, Opiegbe assured residents that efforts were underway to restore full supply soon.

“We are taking every step necessary to restore full supplies between today and tomorrow, so that our people can continue to enjoy the long holidays,” he said.

Continue Reading

Energy

Lagos Charts Bold Course in Energy Sector as Prof. Nnaji Warns Against Unsustainable Power Subsidies

Published

on

By

Governor Babajide Sanwo-Olu of Lagos State

Boniface Oyebanji

Lagos – Nigeria: The 2025 Lagos State Energy Summit kicked off on a high note on Tuesday, April 15, with Governor Babajide Sanwo-Olu declaring the summit open and reaffirming his administration’s resolve to deliver reliable and sustainable energy solutions for Africa’s most populous city. Held at the Oriental Hotel, Victoria Island, the summit attracted key players from the public and private energy sectors, including former Minister of Power and Chairman of Geometric Power Group, Professor Bart Nnaji, who delivered the keynote address.

Governor Sanwo-Olu, while opening the summit, described Lagos as a beacon of innovation and progress in the Nigerian power sector. “Lagos has always led the way, and now we are taking even bolder steps to ensure that our residents have access to uninterrupted power supply,” he said. “With the new Electricity Act of 2023 empowering states to create and regulate their own electricity markets, Lagos is ready to harness this opportunity and drive the sector forward.”

The governor noted that energy is central to economic development and social well-being, and disclosed that his administration had already set in motion plans to generate 4,000 megawatts of electricity through independent power projects. “This summit is not just a talk shop,” Sanwo-Olu emphasized. “It is a platform for building partnerships, charting policy directions, and ensuring that we meet the energy demands of a growing city.”

In his keynote address titled The Journey to Energy for All, Professor Bart Nnaji hailed Lagos State’s trailblazing role in Nigeria’s energy sector, recalling its pioneering move to partner with Enron Corporation in 1999 – long before power sector reforms were formally introduced. “The Lagos State Government took the radical step to bring in Enron, then the biggest electricity trader in the United States, to generate power in Nigeria,” he said. “That was a bold and visionary move under Governor Bola Tinubu.”

Nnaji, who was Nigeria’s Minister of Power in 2012 and a former Special Presidential Adviser on Power, recounted his personal history with Lagos State, including commissioning the 10MW gas-fired plant under Governor Babatunde Fashola. “For me, this summit feels like a homecoming,” he said, citing the 2010 launch of the national power sector roadmap in Lagos by then President Goodluck Jonathan, which he helped to craft.

The energy expert, however, sounded a note of caution regarding the sustainability of the power reforms being pursued by states. He warned that while state governments have the right to establish electricity regulatory commissions and initiate independent projects, they must adopt a commercial approach devoid of politically motivated subsidies. “Power enterprises must be run purely as commercial enterprises. There should be no room for subsidy, otherwise the DisCos will face financial ruin,” Nnaji warned.

According to him, the Federal Government currently spends over N200 billion monthly on electricity subsidies, a cost burden that no state in Nigeria can afford to replicate. “Even with state regulatory commissions, the issue of cost-reflective tariffs remains. If Lagos or any other state tries to subsidize electricity, it will only replicate the same failures that forced some DisCos into receivership,” he noted.

Nnaji welcomed reports that Ikeja Electric and Eko Electricity Distribution Company were establishing subsidiaries to manage Lagos’ internal power needs, describing it as “a positive development that ensures efficiency.” He urged the state government to adopt the embedded generation model used in Aba, where Geometric Power operates an independent and ring-fenced distribution network.

He further commended Lagos for its strategic and methodical approach to power development. “The state appears to have studied the experience of Rivers and Akwa Ibom before calling for bids to generate 4,000MW. This shows foresight and seriousness of purpose,” he said.

Highlighting the national energy deficit, Nnaji lamented that over 80 million Nigerians still lack access to electricity. “This is unacceptable in the 21st century. Algeria has long achieved full access, and there’s no reason Nigeria cannot do the same,” he stressed. He praised the summit organizers for selecting a theme that resonates with the country’s energy challenges.

He also called on Lagos to work with the Federal Government to address the nation’s worsening gas shortage, which he described as a paradox considering Nigeria’s proven gas reserves of over 210 trillion cubic feet. “We are a gas province with sprinkles of crude oil, yet our power plants and even the Nigeria Liquefied Natural Gas (NLNG) company lack enough gas. It is an awful paradox with grave consequences,” he stated.

The summit featured high-level panel discussions on sustainable energy solutions, renewable energy integration, and the role of private capital in energy infrastructure. Participants agreed that Lagos was poised to play a transformative role in national energy development, provided it avoided the pitfalls that have undermined past efforts.

In closing, Professor Nnaji thanked Governor Sanwo-Olu and the summit organizers for the invitation to speak and called for unity of purpose in tackling the energy crisis. “I urge all stakeholders to move beyond talk and implement practical, sustainable solutions. The journey to energy for all is possible – if we act with clarity and courage.”

The summit continues with sessions focusing on regulatory frameworks, financing models, and gas supply optimization strategies as Lagos deepens its engagement with industry leaders, investors, and international development partners.

Continue Reading

Energy

Enugu Electricity Commission Issues Fresh 5MW Power License, Says More Under Way

Published

on

By

● Ferdy Agu 

In yet another milestone in its regulatory efforts to boost electricity supply in the state, the Enugu State Electricity Regulatory Commission, EERC, has issued a 5MW power generation license to Tempo Power Solutions Ltd to set up a gas-fired plant.

This brings to a total of 15MW, the worth of power generation licenses issued by EERC since the successful completion of the transfer of regulatory oversight from the Nigerian Electricity Regulatory Commission, NERC, to the agency on October 22, 2024, a feat it was the first state to achieve in the country.

Speaking during the issuance of the license at the EERC office in Enugu, Thursday, the Chairman and Chief Executive Officer of the agency, Chijioke Okonkwo, said the milestone reflected the growing confidence that private sector players and investors reposed in the Enugu State electricity sector and in the enabling environment created for electricity business to thrive.

“Tempo Power swiftly took advantage of this opportunity offered by the conducive investment climate in Enugu State, engaged an off-taker and successfully completed the application process for the generation license.

“Their project is a model of proactive engagement and strategic partnership, and the successful deployment of this 5MW power plant is a collective win for all of us. We are confident that as the market grows, Tempo Power will continue to scale up its capacity.

“We acknowledge that this transformation was initiated by the visionary leadership of Governor Peter Mbah through the articulation of the Enugu State Electricity Policy 2023 and the enactment of the Enugu State Electricity Law also in 2023.

“Since we successfully completed the transfer of regulatory oversight from the national regulator (NERC) to EERC on 22nd October 2024, we have issued interim licenses, including an interim distribution license to Mainpower Electricity Distribution Limited and a 10MW generation license to Fedikore Limited.

We have successfully resolved over 60 customer complaint issues and we are equally reviewing four license applications covering generation, electricity distribution and electricity retail,” he stated.

While recognising the arduous work ahead, the EERC Chairman reiterated the Commission’s commitment to working collaboratively with stakeholders – electricity providers, policymakers, financiers, and communities – to deliver reliable, accessible, and sustainable power across the State.

He, therefore, advised other would-be investors to emulate Tempo Power by taking advantage of the abundant energy sources in the state and increasingly business-friendly environment being created by the Mbah Administration.

“Enugu State is open for energy business. We invite investors and developers to harness the wealth of natural energy resources in the State. The enabling environment fostered by the Government has made investment decisions easier and more attractive.

“Enugu State has witnessed transformative improvements that support the electricity sector development, including major upgrades in access roads and infrastructure, enhanced security of lives and property, targeted socio-economic initiatives, among others. These developments form the bedrock for electricity investment and most will serve as anchor loads to extend electricity to our underserved and unserved communities across the State.

“Today, we celebrate with Tempo Power Solutions. And soon, we will also celebrate with other licensees whose applications are undergoing review – across generation, distribution, and retailing of electricity,” Okonkwo concluded.

In his remark, the Exective Director of Tempo Power, Mr Collins Kalabare, commended Mbah for setting the pace in what states could do to solve Nigeria’s energy problem, and the EERC for running a professional and transparent system where investors do not need to know anybody to get things done fast.

“I must appreciate the EERC for the professional, business-minded and openness of their processes and operations. The process is seamless and you do not need to know anybody.

“EERC is indeed working according to the vision and speed of Gov Peter Mbah, who we have learnt is in a hurry to develop and make Enugu State*s economy grow and uplift the general status of residents and businesses.

“As a reputable and responsible company, we will be offering uninterrupted electricity supply, cost reflective tariff and electricity supply meant to add value to commercial and residential concerns as well as grow businesses and general economy of the state,” Kalabari said. GMTNewsng

Continue Reading

Trending