The 11 electricity Distribution Companies (DisCos) across Nigeria recorded a combined remittance performance of 39.25 percent in 2020, data from Nigerian Electricity Regulatory Commission (NERC) financial report has shown.
In 2020, the report noted the DisCos achieved a combined billing efficiency of 74.33 percent and collection efficiency of 66.50percent, however remittance performance remained weak at 39.25percent.
Ikeja, Eko, and Benin DisCos were among the standout performers for the year under review with a billing efficiency of 90.95percent, 87.96percent, and 83.96 percent respectively while collection efficiency stood at 78.92percent, 78.62percent, and 53.11 percent respectively.
The three DisCos recorded a remittance performance of 52.79percent, 51.15percent, 39.16percent respectively.
Yola, Jos and Kaduna Discos recorded the lowest remittance performance of 16.05percent, 21.76percent and 23.89percent respectively.
NERC report also revealed that out of N816.15 billion electricity bill issued to consumers by 11 Nigeria’s DisCos in 2020, only N542.73 billion was paid.
This represents a revenue shortfall of N273.42 billion in 2020 from N230.96 billion recorded in 2019.
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However, despite the shortfall, the revenue collected by DisCos in 2020 is 11.38 percent increase from N487.2 billion paid in 2019.
Breakdown of the debt shows that Ikeja Disco gave out an electricity bill of N133 billion but collected only N105.23bn in 2020.
Also, Yola Disco which collected the lowest revenue of N10.74 billion issued out to its customers only N18.72 billion electricity bill was paid.
Abuja Discos issued out N92.97billion electricity bill to its customers only brought back only N82.6billion.
Furthermore, Benin and Eko collected N45.66billion and 84.66billion respectively but issued N85.97 billion and N107.67 billion electricity bills to customers.
The distribution companies in Enugu, Ibadan and Jos collected N47.83billion, N61.8billion and N17.44billion respectively from their customers however, DisCos issued N74.64 billion, N101.16 billion and N30.60 billion electricity bill.
Electricity consumers serviced by Kaduna, Kano and Port Harcourt Discos were given N57.14 billion, N52.57 billion N61.79 billion but only N21.53 billion, N33.84 billion and N31.39 billion was paid.
Electricity Distribution Companies have continued to cry out that the industry may collapse except something is done about the debt owed them.
According to PriceWaterhouseCoopers (PwC), the impact of COVID-19 was most felt in DisCos in terms of the inability of customers to pay their bills and the resultant reduction in revenue collections.
For instance, the COVID-19 lockdown led to shut down of all but essential commercial activities across the country. Consequently, the electricity demand from industrial and commercial customers reduced significantly while the residential market increased expectedly.
“This has led to a distortion in the cost subsidy quality of the tariff and reduces the cash flows to operators,” PwC said.
Discos have a lower tariff for residential customers, sometimes even below the average cost of supply, as compared to that for commercial and industrial consumers.
The above development means the lower tariff-paying consumers are cross-subsidized by commercial and industrial consumers which led to a noticeable revenue loss for DisCo’s due to the reduction in demand from commercial and industrial customers.
