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Monday, 3 September 2018

NERC Moves to Stop Discos from Hoarding Market Revenue


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The Nigerian Electricity Regulatory Commission (NERC) report has shown that Discos were deliberately hoarding market funds to the detriment of the industry, noting that it was working on a framework to stop them from keeping more than their due income in the market.

According to the report, the Discos were still inefficient in their revenue remittances to the sector.

The report revealed that the Discos were issued a bill of N147 billion for energy received from the Nigerian Bulk Electricity Trading (NBET) Plc and for the services provided by the market administrators, but they remitted only N44 billion of the invoice, even after collecting N90.3 billion out of the total bill of N151.8 billion they issued to their customers.

NERC said: “The liquidity challenges in the industry continued to manifest within the quarter as evidenced in the Discos’ remittances relative to the invoice received for energy purchased from the NBET and the invoice received for administrative services from the Market Operator (MO).

“In the third quarter of 2017, whereas Discos were issued an invoice of N147 billion for energy received from NBET and for the services provided by the market administrators, only N44 billion of the invoice was settled, creating a total shortfall of N103 billion.”

It added that “although part of the outstanding invoiced amount not paid to the upstream by Discos is due to tariff deficit, the commission has noted that some (if not all) Discos are not incentivised to improve on their revenue collection because they are currently opportune to appropriate market funds and sometimes keep more than their fair share.”

To address the poor remittance by Discos, NERC said it was developing a framework to ensure fair and equitable distribution of market revenue under a structured regime.

According to the agency, this framework is aimed at ensuring fairness and transparency in the utilisation of market funds, thereby improves the liquidity in the industry.

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