Showing posts with label Electricity Distribution Companies in Nigeria. Show all posts
Showing posts with label Electricity Distribution Companies in Nigeria. Show all posts

Monday, July 16, 2018

A Swot Analysis Of The Meter Asset Provider Regulation (Part 1)

By Idowu Oyebanjo
The recently released Meter Asset Provider (MAP) Regulation by the Nigerian Electricity Regulatory Commission (NERC) in attempting to close the metering gap in the power sector has become inevitable because DisCos have failed to provide meters to consumers within the Nigerian Electricity Supply Industry (NESI) as anticipated by metering targets set in the performance agreements between Federal Government and Distribution Companies (DisCos).
As a result of this failure, estimated billing, electricity theft, meter bypass, illiquidity in the power sector, increased aggregate technical, commercial and collection losses (ATC&C) and consumer apathy towards the power sector reform have been some of the undesirable consequences. Lately, the National Assembly has determined to criminalise estimated billing in response to the cries of consumers nationwide who have in the last five (5) years remained unmetered, let-down and unprotected in the current regulatory environment. By this regulation, NERC aims to achieve revenue assurance within the NESI, reduce illiquidity, close the current metering gap of over 4.7 million meters within the next three years and eliminate estimated billing. It is therefore imperative to consider the Strengths, Weaknesses, Opportunities and Threats associated with the implementation of the MAP regulation.

Friday, July 28, 2017

Nigeria: FG’s Planned Demand For Transparency From DISCOS

By Idowu Oyebanjo
The Federal Government has announced plans to escrow and beam its searchlight into the revenue accounts of the operations of the DisCos due to poor monthly remittances. Although DisCos have condemned the move, this is a good step in the right direction. To address the problems of NESI, a holistic view of every aspect of the multi-faceted problems plaguing it is required with a view to solving them in a coordinated manner. One of the major problems in the Nigerian Electricity Supply Industry (NESI) today is the potential for illiquidity. In simple terms, this arises when DisCos declare, whether truthfully or otherwise, that they have not collected enough money from consumers of electricity and so are unable to make full payments to the bulk electricity trader, NBET, for electricity received. 

This has the potential to always create illiquidity in NESI because their remittances should have been used to pay all key stake holders in the industry including but not limited to GenCos, TCN, Gas providers, market operator, NERC, NBET etc. The solutions to address this anomaly include a massive investment in customer metering, reduction in network losses, preventing electricity theft and collusion of staff of electricity companies with consumers to defraud the industry, discontinuation of estimated billing, and ensuring that revenues collected by DisCos in behalf of NESI is transparent to all key stakeholders, and not least the Federal Government which still owns 40% of DisCos. The government has chosen to implement the last of the afore-mentioned solutions but the DisCos have frowned at the move. Thus a critical review of the position of DisCos is in order.