The Association of Power Generation Companies (APGC) has backed the Federal Government’s intention to escrow the revenue account of power Distribution Companies (DisCos), saying it would enhance equity in revenue sharing, transparency and attract investors to the power sector.
It however, advised the Federal Government to involve the GenCos in its decision making process as it was yet to know whether the N701 billion electricity purchase guarantee fund approved for Nigeria Bulk Electricity Trading (NBET) was a loan, subsidy, or payment of the over N500 billion owed by government.
APGC’s position contradicts that of the DisCos, which had argued that government’s plan to escrow its revenue account would amount to nationalisation of already privatised assets.
The Federal Government through the Nigeria Electricity Regulatory Commission (NERC) said that following inadequate remittances and frequent complaints of shortfalls in revenue generation by the distribution companies, it would escrow the revenue accounts of DisCos. The move, it argued, would ensure that all parties would be certain of the revenue profile of the sector.
However, the Executive Secretary of the APGC, the umbrella of GenCos, Dr. Joy Ogaji at a press briefing yesterday maintained that the introduction of centralised revenue account would motivate performance and improvement in the Nigeria Electricity Supply Industry (NESI).
She emphasised that the electricity sector was a value-chain that needed to be remunerated for power generation, transmission and distribution. She stressed that the revenue being generated by the DisCos should not in any way be seen as personal funds but should be remitted as it belonged to the entire market.
Giving the revenue sharing formula, she said: “GenCos are entitled to 60 per cent of market remittances as they not only generate power but also pay for gas supplies and transportation.
“The Transmission Company of Nigeria (TCN) charges cost at 11 per cent, distribution gets 25 per cent while the remaining four per cent is meant for regulatory charges and Nigeria Bulk Electricity Trader (NBET).’’
Ogaji lamented that the poor remittances often in the region of 30 per cent of generated revenue of market funds by the DisCos had prevented the rest of the electricity value-chain from meeting up with their operations and also service their liabilities, which includes gas payments.
Meanwhile, the distribution companies have alleged revenue shortfall of N809 billion in the power sector. It also picked holes at federal government’s recent approval of N701 billion for the Nigerian Bulk Electricity Trading Plc (NBOT) to pay generation companies for the services rendered.
Director of Research and Advocacy Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan told journalists in Asaba yesterday that the DisCos claimed that the amount covering from November 1, 2013 when the new owners of the companies took over till date includes a balance of N90.41b from the N213b intervention by the Central Bank of Nigeria (CBN) to pay off gas supply legacy debt.
Source: The Guardian