As many parts of the nation continue to
experience blackout, electricity distribution companies have said their
inability to obtain foreign exchange to import equipment and a revenue
shortfall of N300bn are some of the factors hampering their operations.
The firms said the low electricity
generation occasioned by gas supply shortages as a result of pipeline
vandalism meant that power distribution by them would be low.
“There is no forex. So, every time we
have to secure funds to buy meters, we have to do that at the black
market, which is hugely expensive. We should be a priority industry to
grow jobs and to grow this economy,” the Managing Director, Ibadan
Electricity Distribution Company, Mr. John Donnachie, said at a press
conference in Lagos on Tuesday.
Similarly, the Executive Director,
Association of Nigerian Electricity Distribution Companies, Mr. Sunday
Oduntan, said the ability of the industry to meet its service delivery
obligations was severely being constrained by the lack of access to
foreign exchange.
He said historically, tariffs did not
cover full costs and payment obligations, creating significant revenue
shortfalls in the sector.
Oduntan stated, “The revenue shortfall
is adversely impacting the ability of the Discos to make capital
investments in metering, network expansion, equipment rehabilitation and
replacement that are critical to service delivery improvement.
“The industry shortfall is massive and
growing, now about N300bn. This is a cash liquidity crisis that
threatens to completely undermine the electricity value chain and its
ability to continue to serve its customers.”
According to him, the metering gap has dropped to 2.8 million customers, with about 3.3 million customers now metered.
He said the Discos had achieved improved
meter rollout strategies at the customer level and the
interface/trading points, adding, “We are getting better at accounting
for the energy we receive, which will lead to more reasonable estimated
bills.”
He added that the power firms had
introduced a new billing system, with the ongoing customer and asset
enumeration exercises, using the Global Positioning System technology.
Oduntan said, “Gas pipeline vandalism
leads to shortage of gas to power stations and shortage of gas leads to
low generation. Low generation and poor transmission facilities lead to
low distribution. Therefore, the Discos are not to blame for poor power
supply. We cannot give what we don’t have.
“Limited power generation robs customers
of the needed power supply and prevents the Discos from collecting
sufficient revenues to maintain and improve the network.”
According to the ANED executive
director, the Discos collect revenue for all stakeholders in the value
chain, with only 25 per cent of the collection being their share.
He explained, “When customers don’t pay,
the whole sector is affected. Customers bypass their meters and connect
themselves illegally. The industry cannot survive with this level of
theft.
“The debts owed the power firms by
government Ministries, Departments and Agencies plus interests now stand
at N93bn. The industry cannot survive with this high level of debt.”
On the way forward, Oduntan said, “We
need to generate more electricity. Government should honour the terms of
the privatisation. Consistency in regulation-making is fundamental to
the commercial viability of the sector. Government should allow the
Discos easy access to foreign exchange.
“There is a need for partnership among
all the key stakeholders in the sector to resolve all issues.
Electricity is a commodity with a price and customers must pay for their
consumption of this commodity.
“Failure of customers to pay for
electricity means that the Discos cannot make the needed investments
that will result in improved power supply, and theft of electricity by
meter bypass/tempering or illegal connections increase the cost of
electricity for other legitimate consumers. This has to stop.”
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