With a total invoice of N739.68bn, power generation companies were not paid 59.17 percent of the invoice issued in 2020 for the electricity produced and fed into the national grid.
The government-owned Nigerian Bulk Electricity Trading Plc buys electricity in bulk from generation companies through Power Purchase Agreements and sells through vesting contracts to the Discos, which then supply it to the consumers.
NBET received a total invoice of N739.68bn from the Gencos in 2020 but only paid N320.02bn to them.
The nation generates most of its electricity from gas-fired power plants, while output from hydropower plants makes up about 30 per cent of the total generation.
According to NBET, power distribution companies in the country failed to pay a total of N510.53bn for the electricity sold to them in 2020.
The 11 Discos were given a total invoice of N730.71bn for the energy received in 2020 but paid only N220.18bn to NBET.
The regulator said electricity consumers paid a total of N542.73bn to the Discos last year, out of a total bill of N816.15bn.
According to the Association of National Electricity Distributors, Discos only collect an estimated 24 percent of the tariff revenue, while the balance goes upstream to transmission, generation and other industry stakeholders.
NERC, in its latest quarterly report, noted that the financial viability of the Nigerian electricity supply industry had remained a major challenge threatening sustainability.
“The liquidity challenge is partly due to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft and consumers’ apathy to payments under the widely prevailing practice of estimated billing.
“The severity of the liquidity challenge in NESI was reflected in the settlement rates of the service charges and energy invoices issued by Market Operator and NBET respectively to each of the Discos as well as the non- and low payment by the special and international customers respectively for the services rendered by the MO,” the regulator said.
However,the Discos were expected to make a market remittance of 44.87 per cent during the second quarter of 2020 but only 28.05 per cent settlement rate was achieved within the timeframe provided for market settlement in the Market Rules, the report added.