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Discos lose N5 from every N10 worth of energy sold- NERC

Stable and transparent policymaking is essential to reach Nigeria’s electrification targets

The 11 electricity distribution companies (DisCos) in Nigeria’s electricity supply industry are losing as much as N4.79 out of every N10 worth of energy sold, data sourced from the latest Nigerian Electricity Regulatory Commission (NERC) has shown.

According to NERC, the development was due to a combination of inefficient distribution networks, energy theft, low revenue collection and unwillingness of customers to pay their bills.

NERC says the 11 DisCos recorded Aggregate Technical, Commercial and Collection (ATC&C) loss stood at 47.88 percent in the first quarter of 2022. This is composed of 22.62 percent technical and commercial losses and 32.64 percent in collection loss.

In Nigeria’s power sector, ATC & C is a critical performance setting parameter in the MYTO that is used to determine the tariffs that DisCos are allowed to charge customers.

“Conversely, DisCos that underperform relative to their allowed ATC&C losses (i.e., a higher ATC&C loss than allowed), will be unable to earn the expected returns on its set tariffs and could risk long-term financial challenges,” NERC said.

A further breakdown from NERC showed the ATC & C loss was largely driven by Benin (56.75%), Kano (53.89%), Kaduna (74.86%), Enugu (54.19%), and Jos (67.92%) DisCos.

NERC says there is an urgent need for all the DisCos to take emergency remedial actions through customer enumeration and increased revenue assurance to improve their ATC&C losses.

“Failure to resolve this will not only prevent the DisCos from being able to meet their upstream obligations, but it will also saddle them with too much debt and erode their equity,” NERC said.

Read also: Nigerians switch to electronic payment as cash becomes scarce

On market remittance, the regulator said the combined invoices from the Nigeria Bulk Electricity Trading Plc (NBET) and the Market Operator (MO) to Discos in Q1 2022 was N205.63 billion.

It said the invoices were split into generation costs (N164.86 billion), and transmission/administrative services (N40.77 billion).

It said out of this amount, the DisCos collectively remitted a total sum of N135.69 billion. But with an outstanding balance of N69.94 billion, this corresponds to a remittance performance of 65.99 per cent during the quarter.

The report said that poor remittance is a direct consequence of the DisCos recording higher than allowed ATC&C performance.

DisCos records poor customer satisfaction in Q1’22

By Abubakar Ibrahim & Chinedu Ndigwe

Nigeria’s electricity distribution companies (DisCos) recorded poor customer satisfaction in the first quarter of 2022 as complaints rose from the previous quarter..

The total number of complaints received in the first quarter of 2022 was 243,387 across all DisCos and 230,493 of those were resolved.

Port Harcourt Disco had the highest number of complaints (46,152 representing 18.96 percent of total complaints), while Yola Disco had the least number of complaints (1,268 representing 0.53 percent).

The most frequent complaints topics in the second quarter were metering, service interruption, and billing; they cumulatively accounted for more than 65 percent of the total complaints received.

“Out of the total 243,387 complaints received, 79,637 were on metering, 37,186 were related to service interruption, and 41,644 were billing-related.

“These sets of complaint categories also accounted for 58.83 percent of the complaints in the fourth quarter of 2021 which indicates that they continue to be a major concern of consumers,” the report said.

According to NERC, it will introduce initiatives to address these major customer pain points.