DISCOs May Begin to Charge Interests on Outstanding/Unpaid Electricity Bills

The debate to commence charging of interests on outstanding electricity bills owed by consumers has been sparked off among operators of the country’s ailing power sector. What this means is that your monthly electricity bill will continue to increase by a certain percentage which represents the interest compounded over a period of time, even if you do not use power for that period.

This debate was sparked off at a recent meeting of industry stakeholders comprising of representatives of the 11 DISCOs, generating companies, TCN, Market Operators (MO), Nigerian Bulk Electricity Traders (NBET) and NERC. It was gathered that the 11 DISCOs are pushing for this decision due to the latest announcement made by the federal government through NBET that the DISCOs will soon be made to pay interests on the over N120 billion they owe the Market operators since the commencement of the Transitional Electricity Market (TEM) two years ago.

Our correspondents gathered from reliable sources at the Federal Ministry of Power, Works and Housing that NBET has started the process of adding up interest on the amount the DISCOs owe the MO since January 2015. The trading agency is therefore advising all DISCOs to make full payments as their indebtedness may soon accumulate.

NBET is the agency set up by the federal government to purchase power at the wholesale market on behalf of the DISCOs. The DISCOs are then expected to make payments at a later date in order to reduce the financial and liquidity burdens on them. The MO on the other hand regulates the wholesale electricity market and ensures that settlements are adequately made to the various participants. This arrangements are to facilitate smooth electricity market transition.

The DISCOs however lament that their inability to make full remittances is due to huge outstanding debts of electricity consumers, especially, ministries, departments and agencies. They also complained that millions of residential customers have unpaid bills. In a recent disclosure made by Association of Nigerian Electricity Distributors, ANED, MDAs alone owe the DISCOs a whooping N80 billion. They may be compelled therefore to demand payment of interest on such bills in response to the latest NBET decision.

When Power Konnect sought the reaction of Consumers Protection Council on this latest development, no response has been received from the Council so far. Several calls and text messages made to Electricity Consumers Association of Nigeria, ECAN have also not been replied.

Energy analysts and economists are worried that if this decision of the DISCOs sail through, the ordinary Nigerians will be worse for it as the costs of many consumer goods will increase. They are therefore of the opinion that the power sector urgently requires special and emergency intervention by government in order save the sector from total collapse.


Posted by Leye Akinmodiro