Nextier Power Dialogue raises questions on operation of DisCos, others

The Nextier power dialogue, a forum which aims to address issues in the power value chain has raised a number of questions on operation of Discos and others in its April edition with the theme “The Economics and Politics of Pre-paid Meters”.

Nextier issued a communique’ which reads, “In a typical electricity supply market, revenues collected from electricity customers by the electricity distribution companies (DisCos) are expected to channel back into the industry to ensure sustainability of supply.

“Electricity flows from the generating companies, through the transmission company to the customers (through their distribution company).

As expected, market funds flow back up the chain in the reverse direction. Any break in this flow results in significant market distortion. The market is significantly distorted in Nigeria.

“Between January and December 2016, DisCos in Nigeria cumulatively received N365.4 billion worth of electricity but paid only N96.2 billion (or 26.3 percent of their invoices). In fact, in December 2016, only 19.3 percent of the invoices were paid.

In this same month, three distribution companies (Ikeja, Jos, and Port Harcourt) made zero payments. This significant distortion in payments is one of the major reasons why Nigerians do not have reliable electricity supply.

“The above scenario therefore raises a number of questions: Why are the DisCos unable to deploy pre-paid meters to their customers to increase their bill collections?

Why have they continued with the practice of estimated-bills four years after privatisation even though the terms of the sale was that they would provide meters to every single customer within five years of privatization?

“If Nigerians have proven that they are willing to pay for the meters, why are the DisCos unable (or unwilling) to deploy them? What should both the government and the private sector operatives do to correct this situation?

What is the role of the regulator in ensuring that customers are metered and equitably billed? Are there opportunities for entrepreneurs to help resolve this challenge?