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Business Finance Info & Updates

Darkness looms as Discos’ revenue shortfall swells to N1.1trn


An impending collapse of the distribution arm of the power sector value chain is looming as the revenue shortfall of the 11 electricity distribution companies (Discos) has swelled to an all time high of N1.1 trillion.

The huge indebtedness to the Discos was disclosed by the Group Finance Officer of Sahara Power Group, owners of Egbin Power and Ikeja Electric, Mr. Aigbe Olotu, at the Sahara Power Roundtable held in Lagos yesterday.

Olotu, while faulting the N800 billon indebtedness to the Discos being bandied around said the figure was a far cry from the current debt profile of N1.1 trillion, adding that monthly revenue shortfall to the Discos is N30 billion.

On his part, the Managing Director of Nigerian Bulk Electricity Trading Company, (NBET), Marilyn Amobi, who was represented by the Head, Procurement, Mr. Eugene Edeoga, said the problem of the power sector cuts across the entire value chain, saying unlike what the Discos are claiming, it was not all about a cost reflective tariff.

The MD slammed the Discos for constantly demanding for a hike in electricity tariff, stating that, what the Discos are currently collecting as tariff was far more than what consumers would pay even if there was a cost reflective tariff in place.
He argued that because electricity consumers are not metered, majority of them ended up paying more than what they should be paying because the parameters used in arriving at what they pay falls short of the standards approved by the Nigerian Electricity Regulatory Commission (NERC) due to no fault of theirs.

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‘‘At NBET, we do not think the problem of the power sector is all about cost reflective tariff. It is much deeper than that. The problem of the power sector is systemic and runs across the entire value chain. There is no magic bullet that says once there is a cost reflective tariff in place, the problems are solved,’’ he warned.

He urged the Discos to focus more on issues that will address in a holistic manner all challenges plaguing the power sector, rather than focus on just one issue that is not capable of moving the sector forward.

Earlier in his remarks, the Chairman of Sahara Power Group, Mr. Kola Adesina, said the essence of the Sahara Power Roundtable, was to address the current state of the power sector with stakeholders proffering sustainable solutions to them.

He said at the end of the Roundtable, it is expected that the solutions proffered would form a working document for all stakeholders in an effort to build a virile and sustainable power sector to the delight of all.

Also speaking, Founder/ President, Consumer Advocacy Foundation of Nigeria (CAFON), Sola Salako, equally berated investors in the power sector, for constantly failing to carry consumers along, especially as it relates to policy that concerns them.

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Salako said the failure of the Discos to meter consumers has raised an integrity question mark on the sincerity of the Discos because they compel consumers to pay for what was never consumed.

‘‘ How do you explain a scenario whereby a consumer with less than 10 hours of electricity supply in a day is slammed with a monthly bill of N30,000. It does not just add up,’’ she queried.

She called on power investors to fashion out a new communication and enlightenment strategy that will carry along consumers on every of its policy which will ultimately eat deep into the resources of electricity users.

‘‘All these complaints about revenue shortfall are surmountable only if the power investors do the needful by carrying along electricity consumers. They will see how the engagement will translate to increase in their revenue.

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