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Nigeria: No Significant Improvement in Electricity Since 2015, Aned Insists

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The Association of Nigerian Electricity Distributors (ANED) has argued that no significant improvement had been recorded in the energy generated and wheeled to the distribution companies (Discos) by the Transmission Company of Nigeria (TCN) since 2015.

The umbrella body of Discos disclosed this in its latest quarterly performance report, saying the volume of energy received by them since then continued low and flat.

ANED 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 (Multi Year Tariff Order) 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 (Nigerian Electricity Supply Industry)’s liquidity crisis.

“Moreover, NERC (Nigerian Electricity Regulatory Commission) 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 4,000MW during the same period'”

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

The Discos’ body, however, revealed 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 (ATC&C) 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.

“The energy to be received by the Discos continues to be flat, low and far from any of NERC’s projections under the MYTO 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),” ANED explained.