Nigerian electricity distribution companies (DisCos) failed to collect approximately N60 billion in power bills during December 2024, according to data released by the Nigerian Electricity Regulatory Commission (NERC).
This significant revenue shortfall raises concerns about the financial health of the sector and its ability to provide reliable electricity to consumers.
The NERC factsheet reveals that while DisCos billed customers a total of N238.21 billion for electricity consumed in December, they only managed to collect N177.96 billion. This translates to a collection efficiency of just 74.71 percent, leaving a substantial gap of N60.25 billion uncollected.
The data further highlights the varying performance of individual DisCos. Notably, several DisCos recorded collection efficiencies below the national average, indicating significant challenges in revenue collection.
“This level of revenue loss is unsustainable,” stated Aisha Mohammed, an energy analyst at the Lagos-based Centre for Development Studies said. “The DisCos need to significantly improve their collection efficiency to ensure the financial viability of the power sector.”
The inability to collect billed revenue impacts the entire electricity value chain. It limits the DisCos’ ability to invest in infrastructure upgrades, maintain their networks, and pay for the electricity they purchase from generation companies (GenCos). This ultimately affects the quality and reliability of electricity supply to consumers.
Read also: Dangote refinery secures 1m barrels Algerian crude in race to ease domestic shortfall
According to the report, DisCos received a total of 2,705.86 GWh of energy in December, billing 2,257.83 GWh to customers, resulting in an overall billing efficiency of 83.44 percent. This represents a slight increase of 0.11 percent compared to November 2024, indicating a positive trend in DisCos’ ability to accurately meter and bill customers.
However, the revenue collection picture is less encouraging. Out of the total billings of ₦238.21 billion, DisCos only managed to collect ₦177.96 billion, resulting in a collection efficiency of 74.71 percent. While this is an improvement of 5.88 percent from the previous month, it still leaves a significant gap between billed and collected revenue.
The average allowed tariff for December was ₦116.18 per kWh, while the actual average collection was ₦82.50 per kWh, representing a recovery efficiency of 71.01 percent. This means that DisCos are only recovering approximately 71 percent of the revenue they are allowed to collect based on approved tariffs.
A closer look at the data reveals significant variations in performance among individual DisCos. Eko DisCo stands out with the highest billing efficiency of 89.03 percent and collection efficiency of 91.50 percent. Ikeja DisCo also demonstrates strong performance with a billing efficiency of 83.41 percent and a recovery efficiency of 80.71 percent.
Conversely, some DisCos are struggling with revenue recovery. Kaduna DisCo, for example, has a recovery efficiency of only 31.87 percent, while Aba DisCo’s recovery efficiency is 45.91 percent. These low recovery rates suggest challenges in customer payment compliance and potential issues with metering and billing accuracy.
The NERC report also highlights the relative change in performance compared to November 2024. Notably, Yola DisCo recorded the highest relative change in billing efficiency, with a 10.74 percent increase. However, the report also indicates that some DisCos experienced a decline in performance compared to the previous month.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
