Power distribution companies (Discos) in Nigeria generated a total revenue of N292.71 billion in the first quarter of 2024, despite widespread complaints from consumers about inadequate electricity supply. This information was revealed in the latest commercial performance reports from the Nigerian Electricity Regulatory Commission (NERC), obtained on Wednesday.
In January 2024, the 11 Discos billed their customers N130.92 billion and collected N95.26 billion. February saw billings of N113.05 billion, with collections rising to N97.01 billion. By March, collections further increased to N100.44 billion out of N126.56 billion billed.
While Discos have been recording substantial revenue, power generation companies (Gencos) are struggling with significant unpaid debts. On Sunday, Gencos reported that the sector’s total indebtedness had reached N3.7 trillion, posing a serious threat to their operations.
The Association of Power Generation Companies (APGC) emphasized the urgent need for the Federal Government and other stakeholders to address the issue of inadequate payments. According to Col. Sani Bello (rtd), Chairman of the APGC Board, Gencos are currently owed over N2 trillion for power supplied to the national grid, with an additional N1.7 trillion funding gap exacerbating their financial woes.
Gencos also face challenges accessing foreign exchange, critical for maintenance and operational needs, which are often denominated in dollars. They called for a coordinated approach to address the liquidity crisis in the Nigeria Electricity Supply Industry (NESI) to ensure reliable electricity supply for Nigerians.
The inadequate payment has resulted in Gencos receiving only a fraction of their invoices under the payment waterfall system, which prioritizes other expenses over Gencos’ dues. This situation contradicts the terms of the Power Purchase Agreement (PPA) with the Nigerian Bulk Electricity Trading Plc (NBET), which stipulates full payment for available capacity.
In response, Gencos have demanded immediate government intervention to settle outstanding invoices and reprioritize payments to ensure they receive 100% of their due amounts. They warned that failure to address these issues could lead to national security challenges due to potential disruptions in electricity generation.
