The Association of Nigerian Electricity Distributors (ANED) has disclosed that the current revenue shortfalls that have accumulated from the inability of the Nigerian Electricity Regulatory Commission (NERC) to allow the 11 electricity distribution companies (Discos) in the country’s power sector to have cost reflective tariffs have now shot up to N460 billion, thus burdening the operations of the Discos, THISDAY reports.
ANED Wednesday at a power sector workshop in Abuja said the heavy financial shortfalls were impacting on the operations of the Discos such that they may be forced to declare a force majeure. According to documents presented at the workshop, the failure of the NERC to review about three consecutive sets of electricity tariffs between January 2015 and December 2016 resulted in the N460 billion shortfalls.
Responding to this development and a question on why the Discos have rather opted to continue to operate in the sector instead of declaring a force majeure and cutting short their losses, the Executive Director, Research and Advocacy of ANED, Mr. Sunday Oduntan, said: “We are not ruling that out, it is an option. But, is that the best way out? The best way out is for the government to do the right thing. The problem of the sector is liquidity, and there is no cost reflective tariff to the Discos.”