DisCos accuse NERC of wrong tariff, lose N14bn to estimated bills | Dailytrust

DisCos accuse NERC of wrong tariff, lose N14bn to estimated bills

CBN
CBN

Power Distribution Companies (DisCos) have said the suspended Service Reflective Tariff (SRT) was not realistic as the companies lose N14 billion monthly to the capped estimated bills collection.

The Managing Director of the Abuja Electricity Distribution Company (AEDC), Engr. Ernest Mupwaya disclosed this in a presentation on behalf of the DisCos at a public hearing by the House of Representatives Committee on Power, on Thursday in Abuja.

Engr. Mupwaya said there were outstanding requirements before the tariff should be implemented but the Nigerian Electricity Regulatory Commission (NERC) never cleared that.

“One of these is the removal of Estimated Billing caps. The financial impact of the Capping Order is an average loss of N13.9bn monthly, thereby, undermining or jeopardizing the minimum remittance requirement,” he noted.

Daily Trust reports that the new tariff was to be implemented on July 1, 2020 but was suspended after lawmakers at the National Assembly intervened.

The AEDC boss said NERC had changed the criteria forming the basis of the tariff several times without giving DisCos enough time to consult with customers despite COVID-19 issues.

“DisCos believe in the objectives of the service-reflective tariff – if properly timed and implemented, a tariff increment will drive much needed capital into the NESI,” Mupwaya revealed.

To implement the tariff by 2021, DisCos said NERC should initiate realistic Minimum Remittance order (MRO) for market discipline and liquidity as against the current MRO for monthly energy payment imposed on them.

They also want a clean balance sheet for their accounts for them to get loans for further investment.

DisCos also said the Nigerian Bulk Electricity Trading Plc (NBET) should remove future electricity bills of Ministries, Departments and Agencies (MDAs) from DisCos invoices.

“DisCos are yet to be paid N25bn debt already verified by the Office of the Vice President since 2015, even when the MDAs’ historical debts are over N98bn,” Mupwaya said.

Among others, NERC should plan for the impact of COVID-19 pandemic on DisCos’ revenue and operations while DisCos will sign Service Level Agreement (SLA) with Transmission Company of Nigeria (TCN) to end energy misallocation that causes DisCos to lose N1 billion monthly.

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