Transcorp Says Power Generation Companies Owed N68.5b | Independent Newspapers Limited
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Transcorp Says Power Generation Companies Owed N68.5b

Posted: Sep 15, 2015 at 12:22 am   /   by   /   comments (0)

By Phillip Oladunjoye,


The Managing Director of Transcorp Ughelli Power, Adeoye Fadeyebi, has said that the debt owed to electricity generation companies by the market now stood at N68.5 billion.

He said this in his presentation to the senate ad hoc committee set up to investigate past expenditures made by previous governments in the country’s power sector.

Fadeyebi explained that the N68.5 billion outstanding receivables were as at the end of July this year, adding that the money which represents debts for power generated and supplied were scattered amongst the Market Operator, and Nigeria Bulk Electricity Trading (NBET) Plc amongst others.

He also noted that about three electricity distribution companies (Discos) were yet to activate their Power Purchase Agreements (PPAs) with the NBET and subsequently post Letters of Credit (LC) as expected.

Fadeyebi also explained that cases of system collapse, Discos rejection of load, fluctuations in foreign exchange, as well as challenges with power evacuation are some of the challenges in the sector.

Similarly, the Nigerian Electricity Regulatory Commission (NERC) recently noted that the electricity Industry Revenue Requirement had risen to N619b from the previous N572 billion.

NERC Chairman, Sam Amadi, who made the disclosure in Abuja during a presentation at a public consultation on minor review of the Multi-Year Tariff Order (MYTO 2.1), said the new indicators in the minor review include inflation, 8.3% up from 7.8%; exchange rate, N198.97 to the dollar, up from N166.18; energy sent out from stations, 32,921GWH, up from 28,038GWh; revenue requirement N619 billion, up from N572 billion; average retail tariff N23.8 down from N26.8.

He explained that the new review means that the wholesale contract price is now N16, 263/MWh for new entrant generators while the wholesale contract price for Geregu power Plc is now 15,794/MWh.

He said the energy charge has also changed for all categories of consumers except those in R1 class, noting that for instance, residential consumers in R2 class, served by the Abuja Distribution Company, may have to now pay energy charge of N18.41/KWh, up from the frozen charge of N14.70.

Amadi also explained that the new tariff was a reduction of what consumers ought to be paying before the commission froze tariff increase for residential consumers, reiterating the responsibility of the commission to protect consumers.

He said the indices used in the review were obtained from official government agencies.

“The data used in the MYTO review is taken from official sources including the National Bureau of Statistics and the Central Bank of Nigeria. We take the gas price from the NNPC and we take the quantity of generation from the System Operator.

“NERC tries to track these changes and put them back into the model and more importantly present them to the stakeholders because this market is the most transparent you can get anywhere in the world in terms of how we make decisions,” he said.