DisCos achieve 65.99% Market remittance in Q1 2022- NERC

Nigerian Electricity Distribution companies (DisCos) collectively remitted a total sum of ₦135.69 billion, which was ₦109.96 billion for NBET and ₦25.73 billion for Market Operators, with an outstanding balance of ₦69.94 billion in the first quarter of 2022.

NERC disclosed this in its First Quarter 2022 Report released on Friday, revealing that DisCos had a remittance performance of 65.99% during the period.

The report revealed that Nigerian Bulk Electricity Trading plc was expected to receive ₦164.86 billion under the MRO derived from the allowed tariff as FG is responsible for covering the difference in form of subsidy to energy consumers (₦35.27 billion) but only received ₦109.96 billion for the period.

Market remittance:  NERC stated that combined invoices from NBET (MRO1 adjusted) and MO( market operator) to DisCos in 2022/Q1 was ₦205.63 billion: The invoice costs were Generation costs – ₦164.86 billion and Transmission and administrative services – ₦40.77 billion.

• “Out of this amount, the DisCos collectively remitted a total sum of ₦135.69 billion (₦109.96 billion for NBET and ₦25.73 billion for MO) with an outstanding balance of ₦69.94 billion; this corresponds to a remittance performance of 65.99% during the quarter.”
• “Poor remittance is a direct consequence of the DisCos recording higher than allowed ATC&C performance as established above.”

Remittance to NBET:  Discos achieved a remittance performance to NBET of 66.70% for the period.

• “Out of the total invoice of ₦203.13 billion issued by NBET to DisCos for energy generation costs, it was expected to receive ₦164.86 billion under the MRO derived from the allowed tariff; this means the government is responsible for covering the difference in form of subsidy to energy consumers (₦35.27 billion). “
• “However, NBET received only ₦109.96 billion during the quarter. Overall, the total DisCo remittance performance to NBET was 66.70% of the expected MRO for 2022/Q1 compared to 68.34% (₦109.45 billion remitted against an MRT adjusted invoice of ₦160.13 billion) in 2021/Q4.”

Remittance to MO:  The report added the total invoice from Market Operator to DisCos in 2022/Q1 for which a 100% remittance is expected was ₦40.77 billion.

• “ However, only ₦25.73 billion was received across all the DisCos, meaning that the remittance performance to MO for the quarter was 63.12%.
• “This represents a 15.47 pp decrease compared to 78.59% (₦39.75 billion remitted against an invoice of ₦50.58 billion) recorded in 2021/Q4.

Meanwhile, for Remittance by Special/International Customers, no remittance was made by Ajaokuta Steel Company for invoices of ₦391.65 million and ₦69.45 million issued to it by NBET and MO respectively.

NERC noted that for the period, bilateral customers; Paras-SBEE, Transcorp-SBEE, and Mainstream-NIGERLEC received invoices of $2.72 million, $2.74 million and $4.61 million from MO and each remitted $2.72 million (100%), $2.74 million (100%), and $4.52 million (98%) respectively.

“Odukpani-CEET received an invoice of $3.42 million from MO during the period but no payment was made by this customer” they added.

NERC warned the non-settlement of market obligations by this category of market participants should push MO(Operators) and NBET to activate relevant safeguards for remittance shortfalls.