KPMG Power Sector Audit Unravels Abuse of MYTO Framework

 

KPMG Headquarters

Over N200bn owed market participants

Chineme Okafor in Abuja

An audit, which was conducted by KPMG Professional Services on the performance of Nigeria’s Electricity Supply Industry (NESI) in relation to the operation of the Multi-year Tariff Order (MYTO), has revealed serious abuse of the cost reflective electricity tariff framework.
The audit, which was inaugurated by the Nigerian Electricity Regulatory Commission (NERC) in 2010, to reconcile the accounts of the Market Operator (MO) with that of other market participants and determine related liabilities within the electricity value chain, revealed that market participants, especially the MO, had misapplied the MYTO mechanism in the management of financial procedures in the sector right from inception in 2008.

Obtained exclusively by THISDAY, the report equally uncovered the various underhand dealings perpetrated in the market during the review period of 2008 to 2010, all of which resulted to over N200 billion of unpaid energy bills owed to market participants.
It thus raised questions on the management of the N178 billion approved by the Federal Government as electricity subsidies to last from 2008 to 2011.

The audit was commissioned by NERC chiefly to determine the efficiency of the electricity subsidy disbursement process as well as the general efficiency of the market settlement process with a view to proffering recommendations to improve the efficiency and effectiveness of the market settlement process.

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