We settled over 90% of GenCos’ invoices in four years, NBET insists


In what looks like the usual blame game in the Nigeria power sector, the Nigerian Bulk Electricity Trading Company (NBET) has insisted that it has settled between 80 and 95 per cent of invoices of power generating companies (GenCos) in the last four years.

Nigeria’s electricity generation capacity has reduced to record low of about 2,000 megawatts, plunging the country into near total darkness, as 14 power plants have become dysfunctional.

In the face of the epileptic power supply, the GenCos blamed lack of payment of their invoices in the past year and continued ramping down of machines on epileptic national grid The Trumpet gathered.

Head, Corporate Communications of NBET, Henrietta Ighomrore, insisted that the GenCos were paid as and when due, adding that only five power generating companies with active Gas Purchase Agreement (GPA) were paid for unused capacity.

“To put in proper context, NBET makes payment to GENCOS as and when due and has never defaulted on any payment cycle till date. The percentage payment made to GenCos has continually been on the increase, with the N701.9 billion PAF payment, which ensured settlement of at least 80 per cent of GenCos’ invoices for 2018 and 2019.

“The second PAF of N600 billion ensured an average of 95 per cent payment of Gencos invoices for 2020. Also with the current Power Sector Recovery Operation (PSRO) programme that caters for tariff shortfall, the GenCos have continued to receive over 90 per cent payment of their generating invoices for the 2021 payment cycle,” Ighomrore said.

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She explained that market settlement was done based on the Final Settlement Statement (FSS) issued by the Market Operator, noting that once the FSS was issued to market participants, the GenCos send their invoices to the NBET and that it has between 15 to 20 working days to settle GenCos invoices.

She added that it was also within the period that distribution companies (DisDos) make their market remittances to NBET, adding that the settlement cycle had remained seamless and all parties were well acquainted with their respective due dates.

“In fact, in some cases, we make early payments to GenCos before the 15 working days circle. On capacity payments, the contract documents are clear on how it is treated. All GenCos get paid for the associated capacity on energy delivered to the national grid.

Only GenCos with active PPAs get full capacity payment based on their active gas contracts. Active gas contracts are associated with the take and pay obligations, which come with more financial exposure and responsibilities.

“Nonetheless, the National Electricity Regulatory Commission (NERC) has set in motion the process for partial activation of contracts in the sector, which necessitated the scheduled capacity test by NBET to thermal plants across the country,” she added.

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