Tag Archives: Discos

Discos Allege N10 Loss on Every Kilowatt Hour of Power Sold

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The 11 electricity distribution companies (Discos) in Nigeria’s electricity supply industry have claimed that they are currently losing an average of N10 on every kilowatt hour (kwh) of electricity they distribute to homes and offices in their networks.

The Discos also said they have been unable to borrow funds to invest in their networks because of the deficit status of their respective balance sheets.

Speaking in Abuja through their association – the Association of Nigerian Electricity Distributors (ANED), the Discos equally stated they would want the government to legally recognise the current electricity market shortfall as a deferred income which could help them re-engineer their balance sheets to be bankable.

The Executive Director, Advocacy for ANED, Mr. Sunday Oduntan explained that the current shortfall had reached N809.8 billion, and that the Discos have been operating on deficit for a long time now.
“No Disco is making any profit in this sector now. No Disco has less than N10 loss today on power supplied to consumers. We are struggling with cost recovery,” said Oduntan.

He further said the pegging of capital expenditure in the tariff at N20 billion was a challenge to the Discos because they would not be allowed to spend more than that annually on capital projects.
Oduntan explained that with such capital expenditure peg, the Discos would be unable to conclude their metering plans in the sector, as well as expand their network reach.

“Our capital expenditure is capped at N20 billion per annum. What that means is that whatever we spend outside of this in a year, it is our business and not recognised in the tariff for that period.

“Tell me how we will provide meters and transformers and expand our networks. Meter cost money, how can we get money when we cannot borrow because our businesses are not bankable and we are carrying deficits,” he noted.
He further explained: “If you look at the difference as regards tariff, the same quantum of energy which may sell for N10 had by June increased to N18 from December 2015 to June 2016. What that means is that the invoices to us for quantities supplied have increased, and that is why publications by NBET without explanation can be factual but misleading as they have not told Nigerians that costs have increased while the Discos have not increased tariff.”
“We are not clamouring for an increase in tariff but government needs to come in and do something because the shortfall is now N809.8 billion. If the Discos die, the sector will die as well.

“We are all in this together, and we are all in a desperate situation and need help. We will either swim or sink together. We are allowed to sell electricity based on N197/$ which is what is in the tariff. This cannot work,” added Oduntan.

Credit: thisdaylive

Total Blackout Imminent As GENCOs, DISCOs Battle N400bn Debt

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Nigeria may be set for a total blackout as power generation as well as distribution companies say over N400bn debts are stifling their operations.

While GENCOs’ debt is put at over N300bn, DISCOs have complained of being owed over N100bn by customers.

With such a huge debt burden, the power firms said they lack the funding required for their operations, including the purchase of equipment and spare parts.

The Executive Secretary, Association of Power Generation Companies, Dr. Joy Ogaji, said, “The debt is over N300bn that GENCOs are being owed. If the situation is not checked, there will be blackout. It is so imminent that I don’t know if most of the generation we are having now can go beyond Christmas if the payment problem is not solved. We can’t pay contractors; most of the machines are packing up.”

Ogaji said the Nigerian Bulk Electricity Trading Company Plc should be blamed for the problem, saying, “As GENCOs, we don’t really have any direct relationship with DISCOs at the moment; GENCOs are meant to generate power and government brought NBET as a wholesaler, which takes all the power being generated by GENCOs and sells to the DISCOs. So the onus lies on NBET to collect the money from the DISCOs.

“The claim on whether DISCOs are remitting money or not should not be the problem of the GENCOs, but that of NBET. Government told us that NBET is properly capitalised and has enough money to meet all of the GENCOs’ payments. But unfortunately, NBET has not been able to do that.”

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http://punchng.com/total-blackout-imminent-gencos-discos-battle-n400bn-debt/

DisCos Reject Call For Reversal Of Privatisation

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The Association of Nigerian Electricity Distributors (ANED) has rejected the call for the reversal of  power sector privatisation.

Billionaire businessman, Aliko Dangote, had made the call while speaking at the Senior Executive Course 38 of the National Institute of Policy and Strategic Studies (NIPSS), Kuru, near Jos, Plateau State.

Dangote said some of the people who bought power assets do not have an understanding of what they bought.

He advised the government to negotiate with them and find solutions to the problems confronting the sector.

“We should be as open as we can if government doesn’t intervene by taking back these assets and giving them to people who really have money that they can really inject, we will not be able to deliver on power,” he had said.

But the distribution companies (DisCos)  said they have been doing their best, and that there can be no “overnight” solution to a sector that had been mismanaged for over 63 years.

“Anyone who has followed the privatisation of the Nigerian Electricity Supply Industry (NESI) would recognise that the sector has been bedevilled by a number of challenges that would make the most hardened risk-seeking investor to run in the opposite direction,” ANED said.

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DisCos reject call for reversal of privatisation

No Plan To Raise Electricity Tariffs- Discos

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Dousing mounting concerns over another hike in electricity tariffs, the Association of Nigerian Electricity Distributors (ANED) Wednesday said it had no plan to increase the current tariffs being paid by consumers.

ANED’s Executive Director, Research and Advocacy, Mr. Sunday Oduntan, disclosed this in a telephone interview with the News Agency of Nigeria (NAN) in Lagos.

He said the electricity distribution companies (Discos) had not submitted any proposal to the Nigerian Electricity Regulatory Commission (NERC) on a tariff increase.

“It is not true that we want to the increase tariff by 200 per cent because we do not have any right to do so.

“When you talk about tariff review or increase, it is the responsibility of a regulator and that work belongs to NERC.

“We should understand how the system works because it is the work of the regulator to decide whether there should be tariff review or not and not Discos,” said the ANED official.

He urged the National Assembly to reconsider the stoppage of the bond provided by government to address the liquidity challenge bedeviling the power sector.

“We are not asking for subsidy but that government should step in and provide a bond,” he said.

Oduntan said that the business of electricity distribution was currently not bankable because no bank would lend the Discos money with the huge deficits on their books.

Read More: thisdaylive

Discos Set Agenda For Fashola

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For the new Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, is to make any headway as he tackles the perennially weak public power supply in the country, then he must, among others, focus on privatising the Transmission Company of Nigeria (TCN), electricity distribution companies (Discos) have said.

The Discos say the weakness of the grid and the power tussle within TCN, especially the alleged meddling by the Ministry of Power officials, had further dimmed the hope of a vibrant transmission network for the country.

These were among the issues canvassed by the Director of Research and Advocacy for the Association of Nigerian Electricity Distributors (ANED), Sunday Olurotimi Oduntan, in an interview with The Guardian.
“The power sector expects Fashola to sort out the problem in TCN,” he said.

He also called attention to the need for the minister to lead the campaign for a cost reflective tariff and also for the Federal Government to allow the Discos access to funds from Sovereign Wealth Fund.

Credit: Guardian