Exported electricity bills: Togo, Benin.Rep, Niger owe Nigeria $16.11million for Q1 2023, totaling $34.4m in 15 months

Oredola Adeola

Nigeria’s international electricity customers including Togo, Niger and the Benin Republic have failed to remit a total of $16.11 million for electricity consumed in the first quarter of 2023(Q1,2023) translating to a total of $34.4 million as the value of electricity exported to the three countries in 15 months.

The Nigerian Electricity Regulatory Commission (NERC) made this known in its quarterly report, reviewed by EnergyDay.

Nigeria exported electricity worth $50.98m to three countries in 2022, out of which $32.69m has been remitted, leaving a balance of $18.29m, and this adds to the total outstanding debt owed by international customers between January 2022 and March 2023, which is $34.4m.

EnergyDay’s breakdown of the value of exported electricity to the three countries and four power firms showed that Transcorp- Société Béninoise d’Energie Electrique (SBEE) of Benin Republic is owing $3.85 million, Paras -SBEE owed $3.46 million,  Odukpani- Compagnie Energie Electriques du Togo (CEET) owed $3.32 million and Mainstream- Nigerien Electricity Society (NIGELEC) power utility firm in Niger Republic ($5.48 million) in the Q1,2023.

Meanwhile in the fourth quarter of 2022(Q4,23) Transcorp-SBEE, Paras-SBEE, Mainstream-NIGELEC and Odukpani-CEET received invoices of $3.44 million, $3.03 million, $5.50 million and $2.02 million respectively from the market operators (MO).

NERC noted then that out of the total invoice received by the 4 firms in that period, Transcorp-SBEE and Mainstream-NIGELEC made remittances of $0.93 million and $5.44 million respectively, while no remittance was made to the MO by Paras-SBEE and Odukpani-CEET.

In total invoice of $11.05 million was received by the 3 international power firms from MO: Transcorp-SBEE, Mainstream-NIGELEC, and Odukpani-CEET consisting of $1.85 million, $5.67 million and $1.71 million respectively, while remittances of $1.20 million, $5.55 million and $1.67 million respectively.

Paras-SBEE on the other hand failed to make any remittance against an invoice of $1.92 million that it was issued by MO.

In Q2,22, Transcorp-SBEE and Mainstream-NIGELEC received invoices of $2.42 million and $5.56 million from MO and remitted $2.42 million and $5.55 million respectively. Paras-SBEE and Odukpani-CEET also received invoices of $2.39 million and $2.03 million respectively from the market operators during the period but made no payment.

in Q1,22, Paras-SBEE, Transcorp-SBEE, and Mainstream-NIGERLEC received invoices of $2.72 million, $2.74 million, and $4.61 million, but remitted $2.72 million, $2.74 million, and $4.52 million respectively. Odukpani-CEET however failed to clear an invoice of $3.42 million issued by MO in that period.

The payment indiscipline being exhibited by the various market participants, leading to dismay remittances has again come to the fore, even as Special and Cross-border Customers and electricity distribution companies (DisCos) have continued to frustrate the sustainability of the market.

BILATERAL CUSTOMERS

The Market Operator (MO) issued in the period under review issued invoices to all eight (8) bilateral customers in the NESI, which amounted to ₦842.38 million.

EnergyDay gathered that during the quarter, only North-South/Star Pipe made a remittance of ₦15.38 million against an invoice of ₦24.69 million issued to them.

Breakdown of the defaulting bilateral companies include MSTM/INNER GALAXY (N606.31million) MSTM/KAM IND (N39.35m) MSTM/KAM INT (N86.18m) NDPHC/SUNFLAG (N28.73m) NORTH-SOUTH/OAU (N27.70m) MSTM/ADFV (N30.42m) , OMOTOSHO II/EKEDC (N10.20m), OMOTOSHO II/PULKIT (N17.51m) OMOTOSHO II/PRISM (N218.96m) APLE(N595.51m) and TAOPEX/KAM STEEL(N65.08m).

This means that for the period, the cumulative remittance performance of bilateral customers was 1.83%.

REMITTANCE BY SPECIAL CUSTOMER

Under the special customers arrangement Ajaokuta Steel Co. Ltd and the host community did not make any payment towards the ₦0.38 billion (NBET) and ₦0.08 billion (MO) invoices received in 2023/Q1.

EnergyDay gathered that as of March 2023, Ajaokuta Steel Company Limited had a total outstanding debt of ₦26,715,043,905.73 to NBET and ₦1,739,966,505.69 to the MO.

NERC has communicated this longstanding debt to the Federal Government for interventions.

REMITTANCE BY 11 DISCOS

In 2023/Q1, the cumulative upstream invoice payable by DisCos was ₦252.92 billion, consisting of ₦209.26 billion for generation costs from NBET and ₦43.66 billion for transmission and administrative services by the Market Operator (MO).

According to the NERC’s report in the period under review, out of the ₦252.92 billion, the DisCos collectively remitted a total sum of ₦170.59 billion (₦141.51 billion for NBET and ₦29.04 billion for MO) with an outstanding balance of ₦82.33 billion.

It said, “This translated to a remittance performance of 67.43% in 2023/Q1 compared to the 78.69% recorded in 2022/Q4.

“Relative to 2022/Q4, the cumulative DisCos under-remittance to the market increased by ₦11.19 billion which translated to a -6.16-pp reduction in the remittance performance in 2023/Q1,” the report showed.

NERC attributed the customers continued default in payment of their electricity billed amounts to a lack of willingness to pay and unsatisfactory DisCos services.  This according to the commission has led to mounting collection losses recorded by the DisCos.

NERC confirmed that the total revenue collected by all DisCos in 2023/Q1 was ₦247.09 billion out of ₦359.38 billion billed to customers. This translates to a collection efficiency of 68.75%.

“The DisCos cumulative collection efficiency reduced by 4.58 pp from 73.33% in 2022/Q4 to 68.75% in 2023/Q1.

“While the total collections increased by 1.41% (compared to ₦243.65 billion in 2022/Q4), the total energy billed increased by 8.15% (compared to ₦332.28 billion in 2022/Q4).”

NERC noted that the 2022/Q4 to 2023/Q1 decline in collection efficiency was largely driven by Ibadan, Yola, Kaduna, and Abuja whose collection efficiencies decreased by 15.50 pp, 10.20 pp, 8.49 pp and 5.29 pp respectively.  Conversely, the Commission said that only Jos DisCo recorded improved collection efficiency of 4.48 pp.

NERC further hinted that the overall decline in collection efficiency in 2023/Q1 could be attributed to the decline in metering electricity consumers. It stated that the DisCos’ low collection efficiency is a major threat to the financial sustainability of the NESI.

NERC further confirmed that the DisCos have failed to implement metering programs, such as the National Mass Metering Program (NMMP) funded by the Central Bank of Nigeria and the Meter Asset Provider (MAP) scheme.

EnergyDay therefore gathered that the issue of payment indiscipline among market participants in the Nigerian Electricity Supply Industry (NESI) has once again become a concern.

This has resulted in dismayed remittances and outstanding debts from Special and Cross-border Customers as well as electricity distribution companies (DisCos).

The commercial performance of NESI is a crucial factor as it represents the flow of funds from customers to all players in the electricity industry value chain.

While the Market Operator (MO) has threatened to invoke the provision of the market rules to curtail the payment indiscipline being exhibited by the various market participants, NERC has pleaded that adequate financial performance is necessary to ensure the smooth operation of all stakeholders involved.