The 11 electricity distribution companies (DisCos) in Nigeria’s electricity supply industry earned N842.42 billion in revenue in 2022, the highest in five years, according to a new report by the Nigerian Electricity Regulatory Commission (NERC).
Data sourced from the report shows that the total revenue collected by all DisCos increased by 91 percent from N442 billion in 2018.
Experts say the surge in DisCos revenue can be attributed to improved metering technology monitoring, regulatory oversight, increased tariff, infrastructural investments, increased customer base, and improved collection efficiency.
Chinedu Onyegbula, an energy sector expert and director at Bullox Resources Limited, attributes the revenue increase to improved metering, technological monitoring of money flows, enhanced regulatory oversight by NERC and Bureau of Public Enterprises, and increased investments in infrastructural projects by discos.
Data from the electricity regulator indicates a substantial increase in metering installations, rising from 85,510 in Q1 2022 to 164,612 in Q4 of the same year, reflecting a 93 percent growth.
“The intentional efforts by the DisCos to meter the citizens are seen in their revenues. Metering has improved and the price of power has also increased,” said Pedro Omontuemhen, Partner, PricewaterCoopers (PwC).
In the last eight years of the previous administration, electricity tariff rose by 168 percent, with billing jumping from an average of N23.5 a kilowatt-hour (kWh) in 2015 to N63 kWh as of January this year.
For James Akwaji, an experienced professional in the oil, gas, and energy industries, the revenue increase can be attributed to three factors: an increase in the estimated number of customers, a rise in the number of customers using prepaid meters, and improved collection efficiency.
“This resulted in a higher recovery of funds, approaching or matching the amount billed to customers,” he said.
According to NERC, the collection efficiency of DisCos showed a gradual increase from 67.36 percent in the first quarter of 2022 to 73.33 percent in the fourth quarter of 2022, with total revenue collected improving compared to the billed amounts.
Also, data obtained from the National Bureau of Statistics, electricity customers increased by 58 percent from 6.99 million in 2015 to 11.06 million in 2022.
On the other hand, it has been reported that the administration of President Bola Tinubu is looking to increase the electricity tariff by 40 percent in the coming days, which will further increase DisCos revenue.
In addition, the hike in tariff will be in full effect starting July 1, 2023.