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Published On: Thu, Dec 5th, 2019

AEDC decries energy cost increase, amidst losses

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By Etuka Sunday

Abuja Electricity Distribution Company (AEDC) yesterday said that the bills it gets from the Nigeria Bulk Electricity Trading Plc (NBET) has over the last 4 years has risen to 106%, even as revenue inflow only managed to witness an increase of 16%.
AEDC’s Managing Director/CEO, Engr. Ernest Mupwaya disclosed this while briefing members of the House Committee on Privatisation and Commercialisation, led by its Chairman, Hon. Timilenhin Adelegbe, who paid an oversight function visit to his office in Abuja.
The Committee was on the visit to get first hand information on the achievements and challenges in the way of the company’s quest to provide uninterrupted power to customers within the company’s franchise area.
According to Mupwaya, the burden arose mainly because of non-reflective tariff. He said the review of tariff which ought to be done by the regulator proportional to the energy charge has not been done by the regulator for the last 5 years.
“The cost of energy we buy has gone up to 106%, whereas AEDC’s tariff recorded 16% increase between June, 2015 and June, 2019.
“The adjustment which the regulator ought to do has not been done, whereas it is in the agreement that where there is 5% increase in whole energy bill, the regulator should review. This is the root cause of the liquidity problem facing the sector-the energy cost-tariff differential,” he said.
Mupwaya noted that another big challenge militating against the company’s 24/7 supply of electricity drive is the Aggregate Technical, Commercial and Collection Losses (ATC & C.
According to him, the bulk of the collection losses they use to have is the unpaid bills of Ministries, Departments and Agencies (MDAs) whose debts he said accounts for most of the losses.
“One key variable that is key to transformation anywhere is the ability to keep losses at its lowest level possible. As I said, we have been able to reduce the losses from 59% at inception to 39% (i.e. 14% reduction) at the moment, yet they are still quite high.
He urged the federal government to work towards ensuring that everybody gets metered in the shortest time possible as that will address so much of the losses.
The AEDC boss also suggested that the system of allocating energy to distribution companies (DisCos) be abolished to engender competition which is good for the market.
According to him, due to the demand within its franchise area, AEDC has never taken less than the 11.5% allocated it but more, and each time they take more, they get sanctioned by the regulator.
“This is healthy for the system. We need to move to a level where people will struggle for whatever amount of energy they need instead of the fixed allocation we have now that may not guarantee energy where it highly needed.
Speaking, the House Committee Chairman, Hon. Adelegbe who thanked AEDC for all the efforts they are making however urged them redouble their efforts towards improving supply, adding what Nigerians want to see is constant power, and not the technical languages being spoken by the MD.

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