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Owing to the non-review of the Multi Year Tariff Order (MYTO) since February 1, 2016, the shortfall of the Nigerian Electricity Supply Industry (NESI) has exceeded N1.4trillion.
The Executive Director, Association of Nigeria Electricity Distributors (ANED), Barrister Sunday Oduntan, broke the news to reporters in Abuja.
Asked to state what losses the freezing of the review has caused in the industry, he said that “our records show a figure in excess of N1.4trillion shortfall of the value chain.
He promised that supposing the DisCos have a cost reflective tariff, the association would even be bold to list the names of the ones that are not performing well.
Odutan however pointed out that if you cannot collect 30% (revenue) no Jupiter should expect you to remit 100%.”
Giving conditions for an improved power supply in the industry, he said the sector must agree on the landing cost and the payment for it.
The Executive Secretary however suggested that the “other option is to say the price is N100, we subsidize the poor ho cannot pay N11,000 for energy every month. You now subsidize it. If you introduce subsidy, the shortfall, the remaining figure has to be paid for.”
According to him, Kenya; Tunisia; Uganda; South Africa; Ethiopia; Morocco; Egypt; Algieria and Bukinafaso are examples of countries that subsidize electricity for their poor consumers.
The third one is that if government is not buoyant enough to subsidize electricity, it should allow NERC to make a law “that will create an instrument called, regulatory asset.”
Odutan noted that with the creation of the asset, will cover the shortfall in the industry because the DisCos can use it to borrow money from banks.
In every tariff computation, he said, there is an allowance for Capital Expenditure (CAPEX) which the operators expenditures must not exceed.
According to him, the current tariff in the industry is a suppressed one as it gives all DisCos N45billion and each DisCo N5.5billion annual expenditure.
The ANED representative said TCN, on the other hand, has a total of N50billion annual expenditure approved for it, stressing that it is unfair for the TCN to complain about DisCos’ low investment.
With that heavy CAPEX, he said, TCN cannot solve half of its problems.
He also disproved the the acclaimed 7,000Mega Watts (mw) energy generation capacity, stressing that that quantum of electricity does not enter customers homes in Nigeria.
Odutan added that “Today’s TCN has not transported to my members anything near 6,000Mega Watts (Mw) one day, never in the history of Nigeria.TCN has not whelled power up to 6,000mw for one week from 1960 to 2019. Let somebody come out and state otherwise. We will asked them which day and when?”
He noted that the power firms have a higher revenue assurance in metered areas than those that under estimated billings.
He said that despite that the Nigerian Electricity Regulatory Commission (NERC) has saddled the Metered Asset Providers (MAP) with the responsibility of metering the customers, the DisCos, will continue to meet up with their previous obligation on metering.
source: thenationonlineng.net/power-sector-shortfall-exceeds-n1-4tr-due-to-tariff/