Discos may collapse as revenue shortfall hits N300bn

The Electricity Distribution Companies in Nigeria have cried out that the industry may collapse except something is done about the debt owed them. They said on Tuesday that the industry revenue shortfall has hit over N300billion and urged all power consumers, including the government agencies, to pay up their debt.

Sunday Oduntan, Executive Director of the Association of Nigeria Electricity Distributors (ANED) disclosed this, while speaking on behalf of Chief Executive Officers of electricity distribution companies in Lagos.

According to him, the revenue shortfalls has adversely impacted the ability of the discos to make capital investment in metering, network expansion, equipment rehabilitation and replacement that are critical for service delivery improvement.

“The industry shortfall is massive and growing. It is now N300billion”.

“This is a cash liquidity crisis that threatens to completely undermine the electricity value chain and its ability to continue to serve its consumers.

MDAs (Ministry, Department and Agency) debts plus interest now stands at N93billion owed his members, the power industry cannot survive with this mounting debt in addition by dearth of foreign exchange,’’ he said He said that the huge shortfall threatens to completely undermine the electricity value chain and its ability to continue to serve its customers.

The Executive Director, ANED said that shortages of foreign exchange contributed negatively to aggregate industry performance.

“The ability of the industry to meet its service delivery obligation is severely constrained by lack of access to foreign exchange.

Oduntan however, explained that vandalisation of gas pipelines leads to massive drop in power generation.

“Shortage of gas leads to low power generation, low generation and poor transmission facilities lead to low distribution.

“Therefore, the discos should not be blamed for poor power supply because we cannot give what we don’t have’,” he said.

He said that low power generation prevents the discos from collecting sufficient revenues to maintain and improve the network while it also robs off customers of the needed power supply.

He said along the electricity value chain, the discos collect for all stakeholders in the value chain as collection agents, saying that only 25 per cent of the total collections belongs to the discos, but when the customers don’t pay, the whole sector is affected,” he said.

While recounting the achievements of the discos, post privatisation, he posited that metering gap has reduced drastically to 2.8million with 3,283,402 million customers now metered.

“The current number of metered customers have now brought down the metering gap of customers in the country.
Other achievements, according to him, include improved meter roll-out strategies, better accounting for energy received, improved customer care centers, introduction of new billing system and information technology.

Olusola Bello