No significant improvement in Nigeria’s electricity since 2015 – Discos

There has been no significant improvement in the electricity generated and wheeled by the Transmission Company of Nigeria since 2015, the distribution companies have said.

ANED, the umbrella body for the Discos, said in its latest quarterly performance report that the commercial performance improvement recorded by the Discos within the last quarters had been affected negatively by the impact of the COVID-19 lockdown.

It said collection efficiency dropped to an average of 64 per cent in the second quarter of this year, adding, “In particular, the collection efficiency in April was only 49 per cent, although it recovered to 76 per cent in June.”

According to the report, the Aggregate Technical, Commercial and Collection losses moving average increased to 45.7 per cent by the end of June from 43.3 per cent in March, changing the declining trend that had been achieved in the last three years.

ANED said, “The energy to be received by the Discos continues to be flat, low and far from any of NERC’s (Nigerian Electricity Regulatory Commission) projections under the MYTO (Multi-Year Tariff Order) financial model.

“In the last minor review of December to January, NERC dropped its previous projection for 2020 from 123,000 MWh/day down to 96,000 MWh/day (an almost 30 per cent downwards review), which is the main reason for increasing the forecasted tariff shortfall for 2020 to N534bn (N426bn compared to 2019 June’s minor review).”

The Discos said the number of registered end-users in the Nigerian electricity supply industry kept increasing, currently at a rate of about 75,000 new customers per month, resulting in more than 9.5 million customers in total.

“Delays/barriers in the implementation of the Meter Asset Providers regulation is making the metering gap to grow, with almost a 59.7 per cent of the end-users unmetered. MAP regulation is not working as NERC expected,” they said.

ANED said the collection by the 10 private Discos dropped by N14bn or 11.4 per cent to N105bn in Q2 2020 as a result of the COVID-19 pandemic and lockdown, compared to the same period in 2019.

It said, “Since 2015, there has been no significant improvement in the energy generated and wheeled by TCN, that is finally received by Discos. It continues low and flat, only affected by a seasonal effect between the dry and rainy seasons.

“Historical projections of the MYTO model has, demonstrably, remained inconsistent with the energy assumptions of the tariff model and this misalignment ends up increasing the tariff shortfall and accelerating NESI’s liquidity crisis.

“Moreover, NERC in the last TCN’s minor reviews, stated that ‘whereas the capital expenditure provided to TCN in MYTO-2015 Order was to support the evacuation of the average projected generation of 5,465MW in 2016 to 10,493MW in 2019, actual average generation remained between 3,500MW to 4,OOOMW during the same period’”

According to ANED, the Discos’ uncertainty on the energy to be received from the TCN has become a major threat and it will hurt the core of their performance improvement plans as many of the plans are based on the basis of the projections done by NERC at June’s minor review.