₦airaland Forum

There's a hidden truth this statistics won't reveal......... there's is a billing efficiency allocated to different discos based on the efficiency of the network

nairalanda1:
And in other news 60% of metered consumers bypassed their meters.

Metering is not the solution to unpaid bills, nor is it the only cause of unpaid bills. Most nigerians do not want to pay a cost reflective tarrif for electricity. We mostly under pay or do not pay. The result is we get poor power supply.

If you ran a business where the minority of your consumers paid full price for your service, you won't have much of a business would you.

Tell us how other countries manage the power theft that is impossible for your disco to do.

If you claim Nigerians don't want to pay for electricity,how come they willing to pay for their pipie borne water, how come the pay their children school fees, pay for data, recharge card and DSTV subscription.

It is an insult to Nigerian for you to make such blanket assumption that Nigerians are not willing to pay for electricity

nairalanda1:
The discos recieved ₦328.95bn worth of electricity from the gencos. And to pay for that bill they raised the following money... ₦252.87bn billed ie from customers.

That means that they need a further 76 billion naira to be able to pay the gencos in full, money they cannot raise because they cannot charge a cost reflective tarrif for most consumers. And because 20% of their consumers are not paying (higher as you go to the North).

Note that discos also have to pay for transformers , poles, wires, and also have to pay running costs and so forth from that 252 billion naira. Since it is not enough to even pay the gencos basic bill, they cannot even pay for all those things. That is why you are buying wires, poles and transformers for them. Again, subsides on power are not paid in full, and even then are not enough.

As a result, you do not have light, because the sector is running at a loss. And the subsidy government is supposed to pay them is not paid. And tinubu self is not paying his bills for electricity on aso rock.

Hence the need for government to pass a law that let's discos charge a cost reflective tarrif, so that in the long run, investment would be attracted, and more money would flow in, and at the end of the day, you would have better power supply.

Point of correction, which Disco provides infrastructure? Nigerians actually paid the cost of providing power infrastructures like cables, poles, accessories, and transformers themselves most times. The Discos are only out for billing and making money. The entire system is poorly designed to put the power consumers at their mercy.
FG needs to change the format, it's not working tbh.

Again, we need cheap sources of energy. That's the only solution to energy sufficiency and security.

Rebuke:
Whatever! I still have not understood the importance or the idea behind Bands thing

Essentially it was to help to reduce government spending on electricity subsides and also to hope that revenue from band A would help subsidsze bands B-E consumers

The model was borrowed from India, where commercial and industrial users pay a cost reflective tarrif, with the hope that some of the revenue earned from them would subsidise rural customers

As you can see, both countries have power cuts, so it is not working.

Also,the figures show that discos would have to make at least 80 billion naira montly to pay for the electricity they distribute and also to pay for running costs and for maintenance costs and for things like transformers, poles and wires and even meters. But the revenue they raise is not suffient enough thanks to government not letting them charge a cost reflective tarrif for everyone.

Dogalmighty17:
We sit and lament that electricity generation in the country is terrible yet not everyone pays bills. But that's not the fault of Nigerians.

All the electricity distribution companies have consistently sabotaged governments metering programs. If every consumer had a prepaid meter, the issue of unpaid bills wouldn't arise.

The discos aren't telling the truth, they are under paying the gencos completely, there is hardly any home or business that gets electricity that doesn't pay atleast as far as the entire south is concerned......except maybe govt agencies or military and police barracks and offices and I don't see them racking up that difference running into billions in a 30 days month..

Heffalump:
Point of correction, which Disco provides infrastructure? Nigerians actually paid the cost of providing power infrastructures like cables, poles, accessories, and transformers themselves most times. The Discos are only out for billing and making money. The entire system is poorly designed to put the power consumers at their mercy.
FG needs to change the format, it's not working tbh.

Again, we need cheap sources of energy. That's the only solution to energy sufficiency and security.

Yes, and i am saying that they cannot pay for cables, poles, transformers, accessories, because thanks to not being able to charge a cost reflective tarrif, they cannot make enough money to do so.

See the OP's table again...

1 🟠 Abuja — ₦51.79bn | ₦42.16bn
2 🟣 Ikeja — ₦51.50bn | ₦42.67bn
3 🟣 Eko — ₦44.69bn | ₦40.52bn
4 🟣 Ibadan — ₦39.11bn | ₦25.53bn
5 🟤 Benin — ₦27.39bn | ₦18.97bn
6 🟢 Enugu — ₦26.89bn | ₦19.70bn
7 🟤 Port Harcourt — ₦26.27bn | ₦21.06bn
8 🔴 Kano — ₦19.87bn | ₦15.77bn
9 🔴 Kaduna — ₦17.48bn | ₦10.25bn
10 🟠 Jos — ₦16.92bn | ₦11.70bn
11 ⚫️ Yola — ₦6.80bn | ₦4.50bn

National total: ₦328.95bn received | ₦252.87bn billed

The values in the first colummn show the value of electricity DISCOS recieved from the gencos. The values in the second collum show the amount discos were able to raise from consumers to pay off the bill of the electricity they recieved from the gencos.

If you notice, not one of the discos was able to raise enough money to pay for the power sent by the gencos.

And note that this has been happening since the privatisiation of 2013.

And note that the revenues discos raise is meant to pay for transformers, poles and accesories....IN addition to paying for the power sent to them by the gencos.

SInce they cannot even afford to do both because consumers are not paying them enough, the result is you have to buy it. All boils down to most of the country not paying a cost reflective tarrif. It even affects their ability to supply Band A people.

At the end, e get why...they cannot buy your transformer. Not enough money is being made, because people are not paying enough, because the government is forcing discos to sell power below cost, and not paying them subsides owed.

And they are not making money at all at all.

nairalanda1:
The discos recieved ₦328.95bn worth of electricity from the gencos. And to pay for that bill they raised the following money... ₦252.87bn billed ie from customers.

That means that they need a further 76 billion naira to be able to pay the gencos in full, money they cannot raise because they cannot charge a cost reflective tarrif for most consumers. And because 20% of their consumers are not paying (higher as you go to the North).

Note that discos also have to pay for transformers , poles, wires, and also have to pay running costs and so forth from that 252 billion naira. Since it is not enough to even pay the gencos basic bill, they cannot even pay for all those things. That is why you are buying wires, poles and transformers for them. Again, subsides on power are not paid in full, and even then are not enough.

As a result, you do not have light, because the sector is running at a loss. And the subsidy government is supposed to pay them is not paid. And tinubu self is not paying his bills for electricity on aso rock.

Hence the need for government to pass a law that let's discos charge a cost reflective tarrif, so that in the long run, investment would be attracted, and more money would flow in, and at the end of the day, you would have better power supply.

You seems not to be living in Nigeria, how many transformer has disco bought for your neighborhood since it's establishment.

90% of Transformers are procured by government interventions, corporate organisation, individual and helpless communities.

You seems to be taking this your defense of Disco to far. It won't work as long as am here

Ttalk:
Tell us how other countries manage the power theft that is impossible for your disco to do.

If you claim Nigerians don't want to pay for electricity,how come they willing to pay for their pipie borne water, how come the pay their children school fees, pay for data, recharge card and DSTV subscription.

It is an insult to Nigerian for you to make such blanket assumption that Nigerians are not willing to pay for electricity

Simple, they enforce the laws...which means that government actually prosecutes people for power theft.

Nigeria does not do that.

If you do not pay your kids school fees, your children would be sent home, and no jupiter would move the principal or owner to let them back in until you show proof of payment

If you do not pay your data and recharge card, you won't get internent and phone service. At best you would be able to recieve call for some time, before it ends eventually, and then they reallocate your line, since your not paying into it means you are not using it.

If you do not even pay DSTV money, DSTV will cut you off. Your screen would show e-16 message, and it would stay there until you pay something in...at full price for the package. And you cannot do illegal connection

Pipe borne water, the same thing...though since it is subsidised, the water corps cannot provide everyone with water, so you pay for it in borehole fees and buying water fees.

ELectricity,? People can bypass their meters, and when the discos come, they would chase them with weapons. Whole villages would even chase away disco workers coming to enforce bill collection, and then reconnect themselves to the grid and stop paying, so it ain;t the same.

nwirinedu:
They can never recover all the monies from the energy they buy, this model of buying energy by force is not sustainable.

There is something called AT & C losses, these are caused by leakages in the power distribution channels driving by the underlisted:

1. Obsolete and faulty transformers, cables and power infrastructure

2. Meter by passing facilitated by the DISCO staff themselves and other knowledgeable geeks some of which are ex disco staff.

3. Government entities like MDAs, politicians and those in the barracks who refuse to pay their bills because they own government.

4. Corrupt DISCO officials who divert government subventions and subsidies to building hotels and brothels instead of investing in power infrastructure.

Rather than trying to fix their AT & C losses DISCOs resort to billing innocent consumers by way or estimated billing and ridiculous charges .

There is s limit to which you can bill consumers especially when they dont see the value in what they are getting. They will tell you to come and carry your cables and goto hell as we are seeing now.

The DisCos certainly have commercial reasons for not addressing the highlighted causes of AT&C losses that directly affect their business.One thing I know is that an unsustainable business model, especially in circumstances like ours, is not the result of a lack of solutions. Rather, it is because there are many vested interests within the ecosystem. This reflects the situation in many other sectors of Nigeria's socio-economic structure. Until all stakeholders, including the government, genuinely align around a common goal, the country will continue to struggle to make meaningful progress.Let me use an example to illustrate my point. We all know that there are several alternatives to conventional energy sources, with solar energy being one of the most prominent. In fact, it is arguably the most suitable option for our region because of our abundant sunshine and favorable climate. However, because those benefiting from inefficiencies and corruption within the DisCos and GenCos stand to lose these opportunities, any better solution to the country's electricity challenges is unlikely to gain the necessary support. Such solutions would simply be regarded as a threat to their interests rather than an opportunity for national development.

Ttalk:
You seems not to be living in Nigeria, how many transformer has disco bought for your neighborhood since it's establishment.

90% of Transformers are procured by government interventions, corporate organisation, individual and helpless communities.

You seems to be taking this your defense of Disco to far. It won't work as long as am here

You even did not actually read my post old man.

But to make it clear, the figures given show that discos are not making enough money to pay gencos for electricity supplied. THat means that they cannot even make money for the poles and transformers, which is why you buy them

All that is due to the government not letting discos charge a cost reflective tarrif that would enable them to make enough money to pay for all that.

budaatum:
Thank you for your initial post and for this and subsequents. I appreciate you plenty.

https://businessday.ng/pro/article/electricity-subsidy-trap-leaves-9-of-11-discos-on-government-life-support/

No problem, though, I don't think people get it.

They seem to think I work for the discos...lol. When I am just telling them that any business or industry has to charge tarrifs that make them enough of a profit to enable them provide good service.

But people see cost reflective tarrif, and freak out.

Ttalk:
You seems not to be living in Nigeria, how many transformer has disco bought for your neighborhood since it's establishment.

90% of Transformers are procured by government interventions, corporate organisation, individual and helpless communities.

You seems to be taking this your defense of Disco to far. It won't work as long as am here

I am going to post this again, so that you get it...

Right

The discos recieved ₦328.95bn worth of electricity from the gencos. And to pay for that bill they raised the following money... ₦252.87bn billed ie from customers.

The revenue discos raise is supposed to pay for transformers, poles, wires, etc...AND the electricity that they distribute.

But discos cannot raise enough revenue to even pay for the electricity they distribute, talkless of the transformers, poles and wires, because thanks to government policy, only 20% of consumers pay a cost reflective tarrif.

As a result, it is you , the government, and others that buy poles and so forth, because the discos do not have the money to do so.

Simple and short.

And population estimates

BlackViper:
Look at Kano in 8th place out of 11.

Has anyone ever noticed that when it comes to raw data connected to large population statistics, Lagos State is always ahead of Kano State? Be it in number of school children, university graduates, number of homes using electric meters, number of registered phone line users etc, Lagos is pre-eminent over Kano.



But have you also noticed that the only areas where Kano has consistently recorded higher figures than Lagos is in the number of registered voters and number of people living in multi dimensional poverty?

And how do you explain being charged for Band A Tariff while they are not supplying the power for which they are charging consumers. The money they have been making therein doesn't make it into data and statistical analysis.
Then what about being given power and they refuse to distribute so that they can always hold government to ransom for fake subsidy payments. That one is easier to collect in the long run that improving infrastructural capacities and expanding customer base
What ya say!

nairalanda1:
Right and here is something nigerians would miss, including the guy I quoted

1 🟠 Abuja — ₦51.79bn | ₦42.16bn
2 🟣 Ikeja — ₦51.50bn | ₦42.67bn
3 🟣 Eko — ₦44.69bn | ₦40.52bn
4 🟣 Ibadan — ₦39.11bn | ₦25.53bn
5 🟤 Benin — ₦27.39bn | ₦18.97bn
6 🟢 Enugu — ₦26.89bn | ₦19.70bn
7 🟤 Port Harcourt — ₦26.27bn | ₦21.06bn
8 🔴 Kano — ₦19.87bn | ₦15.77bn
9 🔴 Kaduna — ₦17.48bn | ₦10.25bn
10 🟠 Jos — ₦16.92bn | ₦11.70bn
11 ⚫️ Yola — ₦6.80bn | ₦4.50bn

National total: ₦328.95bn received | ₦252.87bn billed

The 252.87 bn naira is the total of the values collected as revenue, while the N328.95 bn is the value of the electricity sent to discos by gencos to distribute..

The above explains why Nigeria cannot pay for good electricity.

And here is the cold fact

1. Only 20% of Nigerian consumers pay a cost reflective tarrif. The rest do not
2. For the rest government is supposed to pay a subsidy that covers the losses coming from paying the subsidised prices.. Government is not paying the subsidy
3. The above, ie no 2 has been going on for years.
4. As a result, the electricity sector cannot pay for improved power supply because it is not making enough money
5. On the good news, metering now covers nearly 60% of consumers and only 20% of consumers do not pay for the electricity they consume (that includes your president in aso villa).

And as a result, there is a severe liquidity crisis in the power sector....which is why we do not have light.

nairalanda1:
Simple, they enforce the laws...which means that government actually prosecutes people for power theft.

Nigeria does not do that.

If you do not pay your kids school fees, your children would be sent home, and no jupiter would move the principal or owner to let them back in until you show proof of payment

If you do not pay your data and recharge card, you won't get internent and phone service. At best you would be able to recieve call for some time, before it ends eventually, and then they reallocate your line, since your not paying into it means you are not using it.

If you do not even pay DSTV money, DSTV will cut you off. Your screen would show e-16 message, and it would stay there until you pay something in...at full price for the package. And you cannot do illegal connection

Pipe borne water, the same thing...though since it is subsidised, the water corps cannot provide everyone with water, so you pay for it in borehole fees and buying water fees.

ELectricity,? People can bypass their meters, and when the discos come, they would chase them with weapons. Whole villages would even chase away disco workers coming to enforce bill collection, and then reconnect themselves to the grid and stop paying, so it ain;t the same.

You are still not making sense with your defense, how is it possible for neighbouring. African countries to meter their consumers and eliminate power theft?

Are you saying DISCO are handicapped in enforcing compliance of their consumer rules? Are you saying DISCO are incapable to cut you off if you don't pay bill?

Ttalk:
You are still not making sense with your defense, how is it possible for neighbouring. African countries to meter their consumers and eliminate power theft?

Are you saying DISCO are handicapped in enforcing compliance of their consumer rules? Are you saying DISCO are incapable to cut you off if you don't pay bill?

Yes, and it is the hard reality. It has even been widely reported.

Like in one extreme example, discos cut off the light of a army base in Lagos for unpaid debts going back years...and the soldiers invaded their office and beat all the workers up brutally. And that is the tip of the iceberg.

The government can help and used to help, but not as much as before. That is why your police needs to be up and doing too...as well as the courts.

9jatriot:
Your argument is really sound, but from the position of a devil's advocate, one can argue that most of the energy consumption in Lagos is from industries and commercial enterprises.

Another argument will be purchasing power. There are many Lagosians who are also known to have better purchasing power, so they can have up to 5 units of 2HP AC running concurrently, whereas a household in Kano may not have all of that.
5 units of 2HP AC, for example, is 7.5 kW; that is more than capable of powering up to 20 houses in some places.

Most of those industries and establishments in the South have an independent power supply.

How many independent sources of power does Kano State have?

Lithiumite:
The discos aren't telling the truth, they are under paying the gencos completely, there is hardly any home or business that gets electricity that doesn't pay atleast as far as the entire south is concerned......except maybe govt agencies or military and police barracks and offices and I don't see them racking up that difference running into billions in a 30 days month..

The values given by OP show otherwise. Discos are underpaying the gencos, because they are not raising enough to pay the gencos' bill

And they even have to still pay running costs, salaries, etc, so...they end up using part of their revenue to pay the gencos, underpaying the gencos even further.

That's why government has to allow discos charge a cost reflective tarrif. And NIgerians have to accept that electricity is expensive.

Later nairalanda1 wee come here and be speaking pay more for power yenyenyen
These people are glorified bandits
All that money and they deliberately sabotage power supply
Smh
🚶‍♂️🚶‍♂️🚶‍♂️

Oga,

Population matters and it counts in GDP. If Kano has more number of heads as claimed then it should reflect in revenue generation and not limited to energy consumption. No be only to dey numbers to win election. Those heads must be useful

ZombieDredd:
Kaiii oga

There is no relationship in billing rates and voting na

Lithiumite:
The discos aren't telling the truth, they are under paying the gencos completely, there is hardly any home or business that gets electricity that doesn't pay atleast as far as the entire south is concerned......except maybe govt agencies or military and police barracks and offices and I don't see them racking up that difference running into billions in a 30 days month..

Military barracks pay o
Forget that rubbish that happened at Ikeja Disco
Infact they pay on time
Police Barracks maybe but Military pays

Welp, seems i was wrong

nairalanda1:
They cannot fix it because government is forcing them to charge below their costs..ie not letting them charge a cost reflective tarrif for most consumers.

See the above figure. Discos are able to raise less revenue than they need to pay the bills GENCOS send them, so at the end, there is going to be corruption, and issues with fixing power.

You do not have the same issues in african countries that charge cost reflective tarrifs.

(Good afternoon).

Did you even bother to read the post? You are always defending rubbish. A company that is not ready to collect its own money from his customers is not ready for business. As a distribution company you can't provide infrastructure, meters, or even collect your own money from your customers, but you want to receive fat checks from Abuja. See you shouting cost reflective tariffs any how, are those already paying cost reflective tariffs getting what they paid for? If the government forced prices on Discos why is same government paying Discos subsidy money? Stop defending the inefficient and incompetent Discos.

BlackViper:
Look at Kano in 8th place out of 11.

Has anyone ever noticed that when it comes to raw data connected to large population statistics, Lagos State is always ahead of Kano State? Be it in number of school children, university graduates, number of homes using electric meters, number of registered phone line users etc, Lagos is pre-eminent over Kano.

But have you also noticed that the only areas where Kano has consistently recorded higher figures than Lagos is in the number of registered voters and number of people living in multi dimensional poverty?

I looked at the data and that's the first thing that occurred to me as well.

We need a sincere census in this country. And we need more raw verified data across board.

nairalanda1:
And in other news 60% of metered consumers bypassed their meters.

Metering is not the solution to unpaid bills, nor is it the only cause of unpaid bills. Most nigerians do not want to pay a cost reflective tarrif for electricity. We mostly under pay or do not pay. The result is we get poor power supply.

If you ran a business where the minority of your consumers paid full price for your service, you won't have much of a business would you.

60% of metered customers do not bypass, that's a big effing lie.

Wellington21:
Oga,

Population matters and it counts in GDP. If Kano has more number of heads as claimed then it should reflect in revenue generation and not limited to energy consumption. No be only to dey numbers to win election. Those heads must be useful

U dey whine almajiri and beasts of no nation? If Allah u akbar is currency, they will be the highest in revenue generation.

greatiyk4u:
There's a hidden truth this statistics won't reveal......... there's is a billing efficiency allocated to different discos based on the efficiency of the network

Please expantiate.

WhizdomXX:
60% of metered customers do not bypass, that's a big effing lie.

Those are figures from the appropriate government regulator.

As stated in the cable...it's 60-68 percent even

Jakarta:
Did you even bother to read the post? You are always defending rubbish. A company that is not ready to collect its own money from his customers is not ready for business. As a distribution company you can't provide infrastructure, meters, or even collect your own money from your customers, but you want to receive fat checks from Abuja. See you shouting cost reflective tariffs any how, are those already paying cost reflective tariffs getting what they paid for? If the government forced prices on Discos why is same government paying Discos subsidy money? Stop defending the inefficient and incompetent Discos.

I am even saying they are ready to collect, after all if they do not collect they would go out of business

I mean, collection efficency is increasing month in and out. And it is even higher than that of 2019, when it was around 60%

Your comment does not even make sense. How can a company that is already struggling with debt not be willing to collect bills from consumer? Is that a sane comment? Oga, I go block una now, because I know you will argue with me for the sake of arguing.

The problem is, for most of their consumers, government is setting their prices way below the market price, and not paying enough in the way of subsidy meaning, they lose money

If you cannot get that, I am sorry, but hand back your certificate. Companies cannot operate effectively when they are operating at a loss thanks to government setting their prices, and thanks to consumers refusing to pay.

If you do not get it, sorry for you.

Sensiblerealist:
And how do you explain being charged for Band A Tariff while they are not supplying the power for which they are charging consumers. The money they have been making therein doesn't make it into data and statistical analysis.
Then what about being given power and they refuse to distribute so that they can always hold government to ransom for fake subsidy payments. That one is easier to collect in the long run that improving infrastructural capacities and expanding customer base
What ya say!

Okay, the problem is that the losses made from undercharging from other bands is making power companies lose money that they cannot even meet their band A obligatons.

That's it in plain english.

Same issue in India.

nairalanda1:
The values given by OP show otherwise. Discos are underpaying the gencos, because they are not raising enough to pay the gencos' bill

And they even have to still pay running costs, salaries, etc, so...they end up using part of their revenue to pay the gencos, underpaying the gencos even further.

That's why government has to allow discos charge a cost reflective tarrif. And NIgerians have to accept that electricity is expensive.

Your argument sounds like a bandit solicitor, it doesn't make any sense at all.

If we should take your assumption, then Disco is running a charity business, they are subsiding Nigerians in the name of business!

Are they NGO?

Power sectors have been privatized more than 10 years, are you saying the business has been running at a loss?

Are you privilege to see their annual report?

Tell me one businessman who run his business at a loss and don't want to do anything about it.

It is the state government I blame who see an opportunity to provide power for their people but chose to leave it in the hand of moribund Disco. If 10 state government can partner with foreign companies to generate and distribute power to his state then all these nonsense will stop.

But Disco days are numbered as many are porting to solar system and only use Nepa as back up. Until they lose the revenue from majority of Nigerians they will continue to mess with the masses