Collapse of Power Supply Imminent, Discos Warn

The 11 electricity distribution companies (Discos) in Nigeria’s electricity industry have warned that the sector was under threat and could collapse anytime on account of various operational challenges, but mostly on the exorbitant and unstable naira to dollar exchange rate.

They said the volatility of the forex was cripplingly their operations.

Speaking through the Executive Director, Advocacy, of their association – the Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, on Thursday in Abuja, the Discos also labelled the industry’s regulator – the Nigerian Electricity Regulatory Commission (NERC) — as inconsistent and inexperienced at its job.

They alleged that the NERC contributed significantly to the current business difficulties of operators in the industry, especially the overall revenue shortfall of the market which they said was now N809.8 billion.

ANED’s warning of an imminent operational collapse and allegations against NERC came at a time the regulator fined the federal government-run Transmission Company of Nigeria (TCN) N47.6 million for various regulatory breaches, including TCN’s failure to submit its 2013 and 2014 audited financial statements to it.

“The crisis is getting worse and not getting better. The major part of the issue is the forex value in doing the business, as at December 2015, the naira to dollar value was N197/$, by June 2016, it became N293/$, as at now we are talking about N360/$.

“If you look at the difference as regards tariff, the same quantum of energy which may sell for N10 had by June increased to N18 from December 2015 to June 2016. What that means is that the invoices to us for quantities supplied have increased, and that is why publications by NBET without explanation can be factual but misleading as they have not told Nigerians that costs have increased while the Discos have not increased tariff,” said Oduntan.