Nightclubs suffer N543 billion revenue loss in 12 months

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The latest report from the Nigerian Electricity Regulatory Commission shows that the total billing to electricity consumers by the 11 distribution companies stands at N816 billion.

The report also shows that of this amount, only N370 billion was collected by DIiscos, leaving a total outstanding of N543 billion.

The data was in the NERC annual report. The latest report shows that the loss was recorded in 2020.

The figures show that billing and collection efficiencies of 74.33% and 66.50% were recorded, indicating a decline of 8.44 and 1.34 percentage points compared to 2019.

The collection efficiency level indicates that up to 3.35N out of every 10N worth of energy sold in the year 2020 remained uncollected from customers at maturity.

Due to the low billing recorded by Discos, utility companies have also been unable to pay in full for the quantum electricity supplied to them by the Nigerian Bulk Electricity Trading Plc.

Further findings reveal that during the year under review, a total bill of N883 billion was issued to the 11 discos for energy received from NBET and for service charges by the market operator.

Of the N883 billion billed to the utility companies, N370 billion has been settled, leaving a total shortfall of N512 billion in the market.

This payment represents a performance of 42% of remittances, which indicates an increase of six percentage points compared to the final settlement rate recorded in 2019 (36%).

Individual performance indicates that Benin and Eko Discos have met their minimum disbursement obligations at MO and NBET, Ibadan has met its MRT at NBET while Enugu and Ikeja have met their MRT at MO.

The average performance of remittances to MO and NBET fell from 78% and 29% respectively in 2019 to 93% and 31% in 2020.

Nightclub remittance performance levels ranged from 48% (Yola) to 100% (Benin) for MO, and from 10% (Yola) to 45% (Ikeja) for NBET.

The tariff gap is the difference between the cost-reflecting tariff and the authorized end-user tariffs payable by consumers.

NERC said the shortfall has contributed to liquidity problems in Nigeria’s electricity supply industry.

Despite the overall market shortfall, the NERC report indicates that the individual discount for 2020 is an improvement over that of 2019.

He noted that the improved remittance performance of Discos was partly linked to the continued application of MRO and the OpEx lending facility offered by the Central Bank of Nigeria-NESI Stabilization Strategy Limited to DisCos.

The facility was intended to partially fund the Discos’ payment obligations to NBET and MO and their operations to support the transition to the service-based pricing regime.

The executive secretary of the Association of Nigerian Electricity Distributors, Sunday Oduntan, could not be reached for an answer on how low remittances and bill collection were affecting their performance.

Over the years, electricity consumers have complained about estimated billing, which they say leads to apathy in paying bills.

Ikeja Electric spokesperson Felix Oulue had recently said that electricity consumers under the billing methodology consume more energy than those already measured.

“Whenever consumers say they are paying too much, the reason is that someone living in a one bedroom sometimes pays more than the person in a three bedroom apartment. For example, someone in a three bedroom uses a gas bottle. Someone in a bedroom is using an electric stove purchased from Lawanson.

“These cookers are probably 10 years old and they use more energy than modern ones. But NERC introduced capping and we were asked to remove our billing methodology, and we were asked to bill based on certain parameters, primarily on the availability of electricity. So some people in certain areas are capped but their bill is high due to power availability. Remember that the guy who uses a prepaid meter is more careful in managing his light than those who don’t have a prepaid meter.

According to a metering expert, Sesan Okunola, the solution to the bill collection challenge is for all electricity consumers to be metered.

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