The power sector may be heading
for a total collapse if the current
paucity of funds in the industry is not
addressed quickly, officials of the
Federal Ministry of Power, Works and
Housing, Nigerian Bulk Electricity
Trading Company and the Nigerian
Electricity Regulatory Commission
have said.
According to them, the sector is
presently suffering from acute
shortage of funds as both power
generation and distribution
companies are finding it difficult to
meet their various obligations to
NBET, gas suppliers and other service
providers.
It was learnt on Saturday that the
inability of NBET, popularly referred
to as the bulk trader, to pay about
N156bn owed the generation firms
was primarily because the
distribution companies were not
paying for the power delivered to
them by the generating companies
through the Transmission Company
of Nigeria.


The power sector was officially
privatised in November 2013 when
the successor companies of the
defunct Power Holding Company of
Nigeria were split into generation
and distribution firms.
The Gencos and Discos were handed
over to private investors who had
promised to revamp the ailing
companies as they progressed.
But the Gencos on Wednesday
threatened in a statement to shut
down power supplies unless the
government settled the
longstanding N156bn it owed them
and improves gas supplies, as they
were finding it difficult to operate.
The Gencos get their payment from
the bulk trader, while NBET makes
the payment from the remittances it
receives from the Discos.
Our correspondent gathered in Abuja
that the Discos had continued to fail
in making the required remittances
to the bulk trader, a development
that had resulted in the inability of
NBET to settle the claims of the
Gencos.
When asked to react to the threat by
the Gencos with respect to cutting of
power supply, the General Manager/
Head, Power Procurement and
Power Contract, NBET, Mr. Yesufu
Alonge, said, “The truth is that
participants in the sector are having
challenges. Now, the Gencos
generate power, which we buy and
sell to the Discos.
“The Discos are supposed to pay us
fully so that we can pay the Gencos,
but they don’t pay. What they pay
most times is maybe around 30 per
cent of what they are supposed to
pay. So, we don’t have enough to
pay the Gencos. The truth, however,
is that the Gencos are really
undergoing serious challenge.”
On why failed NBET failed to settle
the Gencos pending when the Discos
would find their feet with respect to
revenue generation and adequate
remittances to the bulk trader,
Yesufu said that the funds of the
agency were not meant to be used
as subsidy for the power generating
companies.
He said, “The money in our
possession is taxpayers’ money. That
money is not to be used as subsidy.
So, if we go ahead to fully pay the
Gencos and the problem in the
sector is not resolved, what do you
think will happen?
“The only time NBET can use this
money is when, for instance, the
sector is working very well and the
Discos are making the required
remittances. And maybe suddenly
they encounter some challenges and
can’t remit, say about 20 per cent of
what they need to remit. We may
decide to step in, knowing that in a
short while they will clear the debt;
they are not even remitting up to 30
per cent of what is required of
them.”
The power distribution companies
have repeatedly complained that
they are not meeting their
obligations because of the huge
debts owed them by electricity
consumers, particularly the historical
debts owed by the Ministries,
Departments and Agencies of the
government.
The Executive Director, Association of
National Electricity Distributors, an
umbrella body for the Discos, Mr.
Sunday Oduntan, told our
correspondent that the distribution
companies were owed about N100bn
as of July this year by the MDAs alone.
This, according to him, is impacting
negatively on the operations of the
Discos and has limited their ability to
make the required remittances to
NBET.
Similarly, officials at NERC and the
Power ministry told our
correspondent that it was high time
the government intervened in the
sector in order to avert an imminent
collapse.
“There is a problem in this sector
and that problem is paucity of funds
to run the various businesses in it.
Power consumers don’t want to pay
increased tariff; Discos don’t have
money to remit to NBET and NBET
can’t pay the Gencos. This is the time
for the government to intervene
before we regret privatising this
sector,” a senior official at NERC, who
spoke to our correspondent in
confidence, said.

http://punchng.com/blackout-looms-power-firms-become-broke/

Government intervention indeed. Many of these DISCOs were expecting "easy" money from these historical debts, which are mostly crazy, estimated and over inflated bills accumulated over the years. They keep on piling up the figures with the hope that a good percentage of the money would be paid. This one of the reasons why have been very slow and reluctant to engage in appropriate metering of both high and low end consumers. They have failed to earn the respect and trust of consumers, they are OYO (On Your Own). Total darkness? What is the difference between that and what we have now? Many nigerians are scared whenever they receive light bill. Nonsense. *puts on a Disco beat on my generator powered sound system*