ARE ELECTRICITY COMPANIES LOSING MONEY?

When the Senate committee on power led by Senator Ben Bruce recently paid an oversight visit to one of the eleven electricity distribution companies, it was told that the company was not making profit.

No profit, said the Chairman of the company, hence they have been unable to remit money to government coffers. He reportedly added that profit will only be made when tariff is adjusted upwards.

This may be correct but a source told Henates that the company in question makes above N4bn monthly as revenue.

Yes it is possible to make loss from such level of income but did the oversight visitors demand to have a peep into the books of the company?

Indeed, do the electricity companies publish annual accounts at all or they operate like government electricity companies of old without audited figures annually? If they do, which regulatory body apart from say the Inland revenue, do they file such accounts  for vetting and if need, be prior approval?

These questions became necessary because a visiting committee armed with annual reports need not be satisfied with we are making no profit but would have visited armed with relevant questions on expenditure, income trend and future plans given the current state of affairs today.

A visit to the website of the Nigerian Electricity Regulatory Commission (NERC) did not throw more light on the issue.

The site was overflowing with regulations and guidelines on various issues but it was hard to find anything on published annual accounts by electricity companies.

NAICOM handles the accounts of Insurance companies, the CBN prior approves the ones of banks; is it that impossible for NERC to do that for electricity companies? How do we know their true and fair state of affairs?

Given the fact that consumer bills depend on tariff class, location and tariff rates ruling, there are some electricity distribution companies that, under normal circumstances, should not be losing money now.

These are the ones covering Lagos, Ogun/Oyo, Rivers, Kano, and Abuja. In their territories there are enough corporate organisations and income earning individuals apart from government offices amongst their customers to make the whole thing worthwhile.

For them abnormalities should do more with supply of energy, volatile macro economic policies. no funds for capital expenditure and almighty corruption; not low tariff.

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