Power Sector Revenue Loss May Hit N809b

A-power-plant

Should the lull in power supply persist, the sector’s revenue loss will be about N809.8 billion by next January, the Executive Secretary, Association of Nigerian Electricity Distributors (ANED),  Sunday Oduntan, has said.

Besides, payment for electricity bills has fallen substantially as only 35 per cent of consumers pay   yearly.

The loss in revenue was caused by problems, such as non-payment of bills by consumers and failure of the power distribution companies (DisCos) to pay the power generation companies (GenCos) in time,  among others.

The Nation gathered that the sector loses between N10 billion and N15 billion to a wide range of   industry problems, such as pipeline vandalism, low level of water at the hydro power plants, erratic power supply, and inability of the consumers to pay their bills, among others.These problems have contributed to the erratic power supply in the country.

Oduntan in a telephone interview with The Nation said the sector would be losing N809.8 billion by January, next year, if there is no improvement in the operation of the industry.

He said the sector had recorded a shortfall in liquidity of N383.2 billion between 2013 and 2015, adding that the figure would increase as Nigeria’s economy continues its abysmal performance.

Oduntan said: “Between November 1, 2013, when the new investors took over the unbundled assets of the Power Holding Company of Nigeria (PHCN) and December 2015, the sector lost revenues of about N383.2billion. This is the loss recorded by the sector in two years. This is lower than the total loss of N809.8 billion, which the industry will incur between December 2015 January 2017 if the industry continues to grapple with its problems.

He said losses accruing  to the sector were substantial, adding that it would be difficult for the industry to recover the loss soon going by the numerous challenges facing it.

According to him, the power generation companies, the electricity distribution, and others at the value chain, have suffered losses. He stated that the loss in revenue would continue if urgent steps are not taken by the Federal Government to improve the operating environment.

Oduntan also said 30 per cent of the electricity consumers pay their bills yearly, stressing that the issue has impacted negatively on the operation of the sector.

He said: “Consumers on average pay N2,000 out of N5,000 monthly bills DisCos have charged them. Cases abound where many consumers do not pay anything.  A research conducted by the association shows that less than 40 per cent of consumers in Nigeria pay their energy bills. The issue has further compounded the woes of the power firms and the economy in particular.”

The industry, Oduntan said, is battling liquidity problems following the loss in revenue recorded in the past five years. He explained that the problems in the sector are in stages because they do not come once, stressing that the operators are badly affected.

Also, the Chief Executive Officer, Frontiers Oil Limited, Mr. Thomas Dada, said the loss cuts across every aspect of the sector. He said gas suppliers are counting their losses too due to problems in the industry.

He explained that pipeline vandalism has ripple effects on the sector because every operator in the value chain is affected by the development. “Both the producers and suppliers of gas used in generating electricity have lost huge revenues to pipeline vandalism. Whenever pipelines are vandalised in the Niger Delta region, producers and suppliers of gas count their losses. On several occasions, they incur double losses while trying to stay in business,” he said.

Source: The Nation

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