- Customers owe us N10bn – KEDCO
Kano Electricity Distribution Company (KEDCO) is stuck on its inability to post N484.5 million to meet its N1.215 billion Letter of Credit (LC) guarantee requirement to pay for ancillary energy services in the electricity market since July 2019.
Daily Trust reports that the Distribution Company (DisCo) was suspended from the electricity market on July 29, 2019 and August 6, 2019 and has remained suspended as it battles to meet the obligation.
It was found that Kano DisCo defaulted in the topping up of its LC in May 2019 along with other DisCos. Its guarantee-LC is being held by a commercial bank and in the case of payment default, the Market Operator (MO) which administers the market, draws from it to ensure a 100 per cent payment of ancillary services in the Nigerian Electricity Market (NEM) as specified by the Market Rule.
The MO suspended Ikeja, Eko, Enugu and Port Harcourt and then Kano DisCos almost at the same period for such default against the Market Rule, which stipulates 100 per cent payment for such services.
The MO however said it has lifted its suspension orders on those DisCos as they have met their obligations except for Kano DisCo which has not raised the N484m obligatory top up guarantee to add to its existing N731m in the said bank to match payment for the services.
Documents obtained by this paper showed that during the July 2019 market settlement period, DisCos which earlier suffered same fate have had their security cover remedied except for Kano DisCo.
The analysis of the 11 DisCos’ bank guarantee to pay for energy services for at least three months shows that as at July settlement, Ikeja DisCo has the highest bank guarantee of N3.710bn at present. Eko DisCo is next with N3.493bn; trailed by Enugu DisCo with N2.433bn.
Abuja DisCo has no issue as it has posted N2bn guarantee that could pay for its energy services for almost the next three months. Ibadan posted N1.781bn, Benin has N1.577bn bank guarantee, while Kaduna DisCo has no issue with its N1.5bn LC.
Port Harcourt DisCo whose suspension was recently lifted now has N922m security cover; Jos has N728.842m while Yola DisCo which is managed by government has N500.2m guarantee.
The analysis shows KEDCO as the only privatised DisCo that has not met its LC of N1.215bn. While it has N731.1m in its fund, it is grappling to complete it with N484.573m since its suspension and disconnection orders on two feeders by the MO in late July.
Also, investigation revealed that KEDCO is the only DisCo to remit 50 per cent of ancillary services payment for June. Instead of 100%, it remitted N326.9m and owes another half. It also was the only defaulting DisCo in May 2019 with just 50% payment and owes N315.8m debt.
The MO suspended KEDCO on those grounds with the disconnection of two feeders, among seven feeders at one substation of the Transmission Company of Nigeria (TCN) in Kano.
Kano DisCo, on Monday in a statement, blamed the power rationing in some of its franchise areas on low generation by the Generation Companies (GenCos), the rainy season which, it said, was affecting its poles and networks and the TCN/MO suspension.
It pleaded with customers for understanding considering the challenges and that they should pay their current and outstanding electricity bills.
However, statistics from the Independent System Operator (ISO) shows that KEDCO reduced electricity supply to customers by closing many feeders. One of such is the Daura Feeder, where President Muhammadu Buhari’s country home is located.
Beside the two feeders TCN disconnected as sanction in Kano, ISO record shows 12 transmission substations and 54 feeders of 33 kilovolt (kV) type under KEDCO franchise areas – Kano, Jigawa and Katsina states – but many are underutilised.
Statistics of August 24, 2019 shows KEDCO was allocated 289 megawatts (MW) energy in Kano but evacuated 111.9MW. There was 91.5MW in Katsina but it took only 9MW while it took 16.2MW from 50MW allocation in Jigawa.
“Presently in KEDCO network, 33kV feeders that are out due to faults are not attended to. They have disconnected most of their 33kV and 11kV residential feeders,” an official privy to daily allocation said.
‘We should pay N100% but customers owe N10bn’
When contacted on the various issues, KEDCO spokesman, Ibrahim Shawai, confirmed that it ought to pay 100 per cent for energy services.
“We are expected to pay 100 per cent on monthly basis as we have been charged but you see most customers do not pay 100 per cent. From January to July only, over N10 billion is owed to KEDCO as outstanding bills and with that alone we can’t meet a lot of commitments that are required of us,” Shawai said.
He also denied deliberate shutting down of Daura feeder, the disconnection of customers and load rejection records, saying, “Coming to load rejection in our franchise areas as purported, this should not be for us. It is not true because if we don’t supply power to our customers what then are we doing as a DisCo?
“Whatever we do is for the good of all our customers and we will not deliberately do anything to hurt our customers. Irrespective of location, all our customers are unique and deserve power supply because they pay for the services we render,” he stated.
It again admitted power rationing as KEDCO said, “There are issues of poles falling as a result of the raining season when the soil is often weak and other acts like vandalism, which contributed partly to why there may be no regular power in some communities.
“We are addressing such issues and we are also sensitising our community leaders in that regard,” the KEDCO spokesman said.
