Electricity bill deficit drops from N1.89tr
By Jeph Ajobaju, Chief Copy Editor
Deficit in electricity tariff consumers pay to distribution companies (DisCos) has slashed from a record N1.891 trillion to N247 billion, as gleaned from the latest Power Sector Recovery Programme (PSRP) fact sheet.
The PSRP, initiated by the government with the support of the World Bank, aims to ensure that Nigerians have access to adequate, reliable, and affordable power supply.
The report shows the tariff shortfall was reduced through the implementation of the PSRP Financing Plan approved in November 2021.
It describes the plan as “a credible financing plan for the PSRP programme that identifies how tariff shortfalls will be paid and promote sustainable growth of the Nigerian electricity supply industry.”
It explains that “tariff shortfall payment has been cut-down from a historic accumulation of N1,891bn (N1.891tn) to N247bn in 2021, and is on course for elimination by December 2022.”
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Implementation of PIP
According to the fact sheet, per reporting by The PUNCH, Abuja is implementing a Performance Improvement Plan (PIP) for DisCos to ensure they improve service with measurable indicators.
The PIP became effective on 1 July 2021. It tracks service improvements by Discos, monitored by the Nigerian Electricity Regulatory Commission (NERC).
“Total PIP investments are envisaged to be approximately N871bn across the 11 Discos, with funding from Disco financing and government interventions,” it said.
The report also said
- The PSRP aims to improve power supply, restore financial viability and enhance the accountability of the power sector through service delivery and reducing losses on the basis of approval and enforcement of PIPs.
- The plan would improve financial performance on the basis of clearing historical and recurrent tariff shortfalls from DisCos’ books and implementing a fiscally transparent financing plan to cover shortfalls during transition to cost recovery.
- The plan would instill “payment discipline throughout the supply by incrementally, but increasingly enforcing contractual obligations of the sector companies.”
Provision of affordable electricity
NERC Chairman Sanusi Garba reiterated to journalists in Abuja that the government is committed to providing adequate and affordable electricity.
“Notwithstanding the electric power supply industry is now private sector driven, its relevance to economic growth and industrial development will require strategic government interventions,” Garba said.
“At this developmental stage, the industry’s challenges require that hands be on deck to achieve an efficient and effective electric power supply industry that we desire for our economic development.”
He added that the PSRP
- Would enhance financial viability in the power sector, improve electricity supply reliability to meet growing demand, and strengthen industry institutional framework.
- Ensure implementation of policies that promote and encourage investors’ confidence and institutionalise a contract-based electricity industry.
Garba disclosed that about one million meters have been installed in phase zero of the National Mass Metering Programme (NMMP).
He said phase one, which envisages installation of four million meters, will start as soon as the procurement process is concluded.