His grievances, frustration, petition against AmobiWill Nnaemeka Ewelukwa Dance To His Tune?
Now that Dr. Deji Adeleke, father to pop star Davido, has seen to the unceremonious exit of erstwhile Managing Director of the Nigerian Bulk Electricity Trading Plc (NBET), Marilyn Amobi, industry analysts watch with keen interest how the Osun State-born businessman intends to go about the contentious N15 billion he is reportedly owing the Federal Government as alleged by Amobi, with whom Adedeji has been having a running battle over disputed transactions between his company, Speco-Pacific Energy Co Ltd and NBET.
Marilyn Amobi had alleged that Adedeji was owing NBET a whooping sum N15 billion in a counter move against Adedeji, who had earlier claimed that the trading company was owing his company, Sepco-Pacific the sum of N13.5. Speco-Pacific Energy Co Ltd owns Omotosho (in Ondo State) and Olorunsogo (in Ogun State) power-generating plants with combined capacity of 608mw.
Amobi, whose tenure ended yesterday, July 24, had raised concerns over Adeleke’s company indebtedness to NBET to the tune of N15 billion, which was the total of N200 million monthly premium Sepco-Pacific earned from May 1, 2018 to June 30, 2019.
The revelation came to the fore after Adedeji stated that NBET deducted N5.2 billion from Sepco-Pacific’s account in respect of foreign exchange differentials and another N8 billion “surplus payments” to the two GenCos.
Adeleke’s plants (Olorunsogo and Omotoso), in September 2013, entered into power purchase agreement (PPAs) with NBET — the company that buys power from GenCos and sells to DisCos and then settles the invoices.
Under the PPAs, the base exchange rate to be used in calculating the payments was fixed at N157/$, although there was a provision for “true-up invoices” which would reflect the actual rate in invoicing the DisCos.
However, NBET raised issues with the invoices, maintaining that Sepco-Pacific had wrongly used a different base exchange rate — N157/$ — and that the rate should be N169/$ for the invoices in question.
With a lower exchange rate, Sepco-Pacific would get more dollar value from the payments. The adjustment to N169/$ lowered its claims by N5.2 billion.
Another issue of dispute is the N8 billion paid to Omotosho and Olorunsogo for power supplied to DisCos through the national grid.
Payments made to four plants — including the N8 billion to Omotosho and Olorunsogo — were above what was approved by President Muhammadu Buhari and NBET has insisted that it must be refunded as directed by the federal government.
In 2016, Olorunsogo had received $13,782,130 (N4,208,535,131.25, at the prevailing exchange rate) and Omotosho got $13,166,466.88 (N4,020,520,405.38) — in excess of what the president approved.
Following a reconciliation of accounts contained in a report dated May 23, 2019, NBET was directed by the federal government to deduct the overpayment to the four power plants, out of which Omotosho and Olorunsogo had to return over N8 billion.
Meanwhile, NBET also alleged that from May 1, 2018 to June 30, 2019, Sepco-Pacific was earning a premium of N200 million monthly and would have to refund over N15 billion as a consequence.
According to NBET, the amount will be used to “reduce” the indebtedness to Adeleke’s company.
Going by NBET claims, Sepco-Pacific is the one owing rather than being owed — if its N13.5 billion claim is deducted from the premium of over N15 billion it earned for 13 months.
Adedeji lamented his ordeal in the hand of Amobi whom he accused of being all out to destroy his business. In a letter seen in the media, Adeleke berated Amobi’s the four-year tenure at NBET.
“NBET, under your leadership have (sic) severally ignored NERC’s rulings and acted beyond your authority on anything that concerns Olorunsogo & Omotosho Power Plants. But very soon you will have to explain to the whole Nigeria the reason you are out to destroy Olorunsogo and Omotosho Power Plants. Your type does not build anything but destroys. Instead of encouraging investors in the Power Industry you are out to destroy investments.
“In your almost 4 years as MD NBET, you have not added value to the Nigerian Electricity Industry. Instead of payments from DISCOs increasing, it is decreasing, and it does not bother you. How many new Investors have you attracted to Nigeria? How many PPAs have you executed since you came to office? The Nigerian Electricity industry will not GROW as long as you are allowed as MD of NBET to disregard NERC, the Industry Regulator without consequences.”
“You have not done anything in almost 4 years to insist that DISCOS make the Minimum payment on the Electricity GENCOs GENERATE at HUGE COST and high Indebtedness to Banks. Why have you been shielding the DISCOs? Why have NBET NOT DRAWN ON DISCOS’ LETTERS of CREDIT to pay the GENCOs? Why have NBET not written an ordinary DEMAND LETTER to the DISCOS with a threat that their L/Cs will be DRAWN upon? These are questions you need to answer to the whole industry and explain the seemingly unholy alliance between YOU and the DISCOs,” he wrote.
“You deducted the sum of N5.25 Billion from Olorunsogo & Omotosho Power Plants and refused to refund the money almost 2 years after NERC ruled that the Base Exchange Rate, which you unilaterally and illegally changed to N169/$, should remain the same at N157/$ as stated in the PPAs. And as a result of your refusal to refund the N5.25Billion, Olorunsogo and Omotosho Power Plants had to borrow money to pay 100% of Gas Invoices for period of January 2019- September 2019. You also deducted from the amount NBET owes Olorunsogo & Omotosho Power Plants the sum of over N8Billion claiming that the Market Operator overpaid both Power Plants despite the RECONCILIATION signed by the Market Operator and Power Plants, without the courtesy of informing the Power Plants in writing for such a huge amount.
“According to the PPAs the Tariff for both Capacity & Energy becomes lower in the 7th year of the Contract, which NBET implemented immediately on Olorunsogo Power Plant on the commencement of its 7th Year, and that is perfectly in order. However you have refused to recognize the Exchange Rate True Invoices submitted by Olorunsogo & Omotosho Power Plant, which is provided for in Schedule 6 of the PPAs, saying each time that NBET is not ready to treat Exchange Rate True-ups yet.
The PPAs did not give NBET the liberty to decide ‘if & When’ the Exchange Rate True-up invoices will be recognized and accepted.
“One can safely conclude that any provision of the PPAs that reduces the Plants revenue is implemented without delay, while any provision of the PPAs that will increase the Plants revenue is delayed indefinitely. How can any company survive under this type of business atmosphere under your leadership of NBET? This type of poisonous business atmosphere only lays the foundation for blackmail and corruption,” Adeleke expressed.
Conversely, Amobi, in her response, maintained her innocence, citing the clauses in the various agreements which stipulate the basis for the calculation of quantities and make provisions for corrections where errors occur.
She said in the market rules the plants signed with the market operator, disputes on quantities and settlement data are not supposed to be referred to either NERC or NBET but are to be resolved between the participant (GenCo) and the market operator (DisCo). She also said it was not a matter to be taken to arbitration.
On the use of base exchange rate of N157/$1 and N9.47kWHr as derivable tariff as directed by NERC, Amobi said the commission appeared not to be conscious of the fact that the exchange rate “does not exist in its MYTO Order of the same Commission as a Base Exchange Rate that would be used to architect the tariff of generation companies in 2013”.
She wrote: “NBET is, however, concerned that the Commission justified its ratification of the erroneous N157/US$1 on the suggestion that the derivable tariff of NGNN47kWHr is lower than the NGN10.423/kWHr that was originally sought.
“In NBET’s opinion, if the Commission carried out a further robust analysis of the elements of the derivable tariff viz-a-viz the assumptions in the MYTO for generation companies in 2013, it would have discovered that your companies earn a premium of over N200Million each month.
“Furthermore, NBET believes that the reason the Commission put forward to justify the asking that your base exchange rate be reversed to NGNN157/US$1, is NOT a criterion for setting rates in network utilities.
“By a forensic evaluation of the elements of the tariff for each of the power plants in its portfolio, NBET discovered that your plants had a Base Exchange Rate of N157/US$1 and not N169/US$1 as contained in the Multi Year Tariff Order of the Commissions that was in effect in 2013 when the PPA was executed; and which was the basis for arriving at the base tariffs for both Olorunsogo and Omotosho.”
