N190bn Electricity Debt: NDPHC Mutes Idea of Selling Direct to Consumers
Nigeria may adopt the policy of selling electricity straight to eligible customers without passing through the Nigerian Bulk Electricity Trading Plc if a suggestion from the Niger Delta Power Holding Company (NDPHC) is favourably considered.
The company has complained that the debt of N190 billion representing electricity consumed but not paid for by consumers is affecting the capacity of eight power plants built by the government under the National Integrated Power Projects (NIPP) to perform.
The management of NDPHC said yesterday that the Nigeria Bulk Electricity Trading Plc (NBET), the intermediary between Generation Companies (GenCos) and the Distribution Companies (DisCos), is lagging in its payment obligation to the NDPHC, causing poor operational performance at the eight NIPP GenCos.
Related News: Reps to Probe NBET’s Operations from 2015-2020
The NDPHC is owned by the federal government 47% and the state governments 35%, while the local governments have 18% shares. The Company, which manages the Gencos, has been removed from Nigeria’s annual budget, as it is expected to generate and fund its own budgets, and run its operations from what is being generated from the power plants.
The Managing Director of NDPHC, Chiedu Ugbo, said the debts have become choking and are making it difficult to achieve smooth operations. “As at May 31, 2020 over N190bn was owed to NDPHC for electricity generated from our power plants to the national grid,” a record from the Company said.
The company said the operational plants have 4,047.3 megawatts (MW) capacity but that the regulatory authority had lowered the tariff at N18.4 per kilowatt hour (KWh) as against N24/kwh paid to other GenCos.
The breakdown of the debt shows that the NIPP GenCos were owed N24.5bn as legacy debt from 2011 to 2013; during the Interim Rule Period of the electricity market from 2013 to 2015, another N6.8bn debt mounted.
Between 2015 and 2020, the NDPHC said NBET owed N281.1bn debt for the NIPP GenCos’ energy, resulting in a total debt of N312.4bn. However, NDPHC said, through the federal government’s intervention with the Payment Assurance Facility (PAF) initiative from 2017, NBET cleared N119.4bn of the debt but that N193bn was outstanding since last month, adding that the Company needs the money to continue to provide statutory services.
The various interventions by the FGN are intended to reduce this indebtedness principally owed by NBET. Ugbo argued that good as the federal government intervention is, there is no assurance if and when it will come. “Truth is that we cannot continue this way. These debts exist; all there is to do is recover them and pay,” he said.
Chibisi Ohakah, Abuja