Electricity trading firm owes generation companies

The Association of Power Generation Companies (APGC) says power Generation Companies (GenCos) have not received payment for electricity generated since June 2018 from the Nigerian Bulk Electricity Trading PLC (NBET).
The Executive Secretary of APGC, Dr Joy Ogaji, said in Abuja that GenCos were owed N500 billion for power generated from 2013, when they took over electricity generation, to December 2016.
“The GenCos debt is classified into about three categories, so when you are talking about debts, before even NBET came, market operators are owing GenCos.
“Because the Power Purchase Agreement (PPA) says if they delay to pay, GenCos are entitled to interest, so this amount is without interest, it does not also cover the cost for available capacity.
“You know GenCos makes capacity available, so the power that is been rejected it does not cover that one, because that one is a different cost.
“From 2017, NBET, through Federal Government’s Payment Assurance Guarantee has only been paying 80 per cent and there is 20 per cent short fall till date.
“And for this year, since June we have not been paid,’’ Ogaji said.
On GenCos meeting their obligation on payment to gas companies, he said:
“GenCos have been taking loans from the banks to be able to meet their obligations in the market and put power on the grid.
“Because when we don’t generate, we are called saboteurs they will start saying that the owners of the GenCos are PDP members that is why they are not generating.
“But the government is not looking at the cost implication of putting power on the grid and you are not paying for it.
“There is no business person that will want to continue business when you are not getting anything on it and upon that you are being accused that you are a saboteur.’’
The APGC executive secretary, however, said GenCos were engaging NBET on the nonpayment since June.
Reacting to alleged non-payment of GenCos invoice since June, Head Corporate Communication of NBET, Mrs Henrietta Ighomrore, said that comment on GenCos not receiving their payment for their invoice since June was not accurate.
She said GenCos had always receive their payment as at when due, saying that at no time did NBET withhold payment to GenCos.
“NBET do not retain any money, every money we receive from the DisCos, we immediately pay it to the GenCos to settle their invoices.’’
She said it was important to understand how payments were made in the electricity market.
“For instance, if you have January invoice, that invoice will be coming to you around end of February or early March.
“Because when the generating companies generate and then they send to us and then we send to the DisCos.
“Then all of these transactions at the end of the month, the Market Operator (MO) will now read the meter and will now raise the market settlement statement.
“The MO will now send it to us, we will send to the GenCos and the GenCos will also receive it and send to us, then we will send to the DisCos, so the issue of not receiving payment since June, that is not accurate.
“The thing is that most people in the electricity market don’t give very detail information, so you find out a lot of information outside are mere speculation.
“You must understand that for instance, if I receive January bill by the time it will be getting to me will be around March by the time I will be making the payment it will be middle or end of the month.
“But when somebody comes in March and says I have not been paid in January that is not accurate because there is no way you can pay January bill in January.
“The settlement statement is read at the end of the month, and at the end of the month they are sent to the market participants.
“So there is a time allowed for market participants to comment on the settlement statement.
“That whole time lag in the sector is about 90 days from the time the meter is read, to the time the settlement statement gets to everybody and to the time payments is done,’’ she explained.
Ighomrore, however, said through Federal Government’s provision of N701 billion Payment Assurance Guarantee loan, NBET had been making 80 per cent payment generation invoice of GenCos in the last 18 months.
“One of the things that the GenCos have not always being saying is this, there is a N701 billion that Federal Government approved loan and we use it to top up payment to the GenCos.
“And that is not part of their contract, but because of the nonpayment that DisCos receive, Federal Government now taught of raising additional payment supplement so that NBET can use it.
“Now this loan that Federal Government gave to NBET is because of the low remittance that we get from DisCos, so that we don’t allow the GenCos to suffer because of the low payment from DisCos.
“So when people say that NBET is not making payment, it is not a true reflection of what is happening in the market,” she said.
On allegations of financial infraction leveled against NBET Management by an official of the company on a popular radio reality programme, the spokesperson said: “Unfortunately I have not listened to the transcript of the radio show, but there is no crisis in NBET, you can come to our office and see that everybody is going about their normal business.
“In an office there may be internal and operational issues, those internal issues are things we attend to internally.
“We have a policy manual; we have grievance procedure, if there is any body that is aggrieved, follow through the procedure and get result.
“So we are more focused on delivering technical duties, the internal operational issues are not things that should be splashed on the pages of newspapers or radio stations.”