Military, MDA’s debt to electricity firms exceeds N45bn

*Electricity metres.

*Electricity metres.

*Distributors seek Govt’s help to recover debt

Oscarline Onwuemenyi

14 January 2016, Sweetcrude, Abuja — Electricity debts owed the Distribution Companies, Discos, by the military establishments as well as government ministries, departments and agencies, MDAs, is said to have risen to N45 billion as at the end of last year.

The Executive Director, Association of Nigerian Electricity Distributors, ANED, Sunday Oduntan, told journalists in Abuja that the distribution companies were going through several challenges, especially in collection of payment for electricity supplied customers, adding that the worst debtor-customers are Federal Government’s MDAs and the military.

He said previously, the outstanding debt owed by MDAs was N32 billion, but has grown to N45 billion. Owing to the difficulty in collecting this debt, the distribution companies are discussing with the Presidency on method of payment.

He explained that due to supply value chain inefficiencies, about 50 per cent of power bought by the Discos is not paid for.
These include power theft, inadequate collection infrastructure, and insufficient/non-cost reflective tariff.

According to him, the challenges have put the distribution companies under serious financial pressure because Discos are collection agents for the entire power industry, adding that the shortfall in revenue collection by the Discos affects the entire value chain.

Oduntan said the Discos have been discussing with the government on method of payment since the time debt was N32 billion because they need that money to purchase equipment such as meters, among others, and also oil the operation to serve the customers satisfactorily.

He said Vice President Yemi Osinbajo has promised to intervene in the case and he is optimistic that government may start to deduct future bills and debt from source.

Oduntan noted that the military and agencies have budgetary provisions for utility bills payment, and have no justification to owe. “In the budget, they actually have allowances for utility bills’ payment.

“These military formations are properly metered. It is not that they are on estimated billing or over-billed, and don’t have reasons not to pay but they felt it is their right not to pay for the power they consume forgetting that the current power sector is under the private sector control,” he noted.

He added, “We had a meeting with the Federal Government presided over by the Vice President, Prof Yemi Osinbajo, and he listened to all the stakeholders including the Nigerian Electricity Regulatory Commission (NERC), Market Operator (MO), Nigerian Bulk
Electricity Trading (NBET), generating, and distribution companies. We all tabled our problems and the government assured us of looking at the issues. The Vice President promised us that the MDAs will pay the debts. We will continue to discuss with the government until the debt is paid,” Oduntan said.

The ANED boss stressed the importance of the government agencies to pay the huge debt and the need for all electricity consumers to be committed to payment of bills promptly.

He said for the country to have the desired level of electricity supply, all categories of customers should endeavour to pay their electricity bills appropriately and the government should encourage massive investment in the sector.

About the Author