NERC: Electricity subsidy cost FG N204bn in Q3 2023

By Abubakar Yunusa

The Nigerian Electricity Regulatory Commission (NERC) says the government incurred a subsidy obligation of N204.59 billion in the third quarter (Q3) of 2023.
NERC disclosed this in its Q3 2023 report.
According to the report, the subsidy expenses were incurred due to the lack of cost-reflective tariffs across all electricity distribution companies (DisCos).
“It is important to note that due to the absence of cost-reflective tariffs across all DisCos, the Government incurred a subsidy obligation of N204.59 billion in 2023/Q3 (average of N68.20 billion per month), which is an increase of N69.37 billion (+51.30%) compared to the 135.23 billion (average of ₦45.08 billion per month) incurred in 2023/Q2; this increase is largely attributable to the government’s policy to harmonise change rates,” the report said.
Only “45 percent of the total invoice received from NBET” was expected of DisCos in Q3 2023, according to NERC, due to the increase in the government’s subsidy obligation.
NERC said the average available generation capacity dropped by 4.02 percent or 76.47 megawatts (MW) from 4,387.91MW recorded in Q2 2023 to 4,211.44MW in Q3 2023.
The decrease recorded, according to the commission, was mainly driven by the reduced available capacity of 12 out of the 27 grid-connected power plants.
“Six (6) out of the seven (7) plants with the highest available capacity in 2023/Q2 (Egbin ST, Delta GS, Kainji, Odukpani, Okpai, and Afam VI) recorded decreases in their available generation capacities in 2023/Q3,” NERC said.
“The highest decreases in available capacity relative to 2023/Q2 were recorded by Odukpani and Okpai plants with -53% and -20% respectively.
“Shiroro, Azura IPP and Jebba power plants recorded increases of +51.71%, +22.07% and +17.54% respectively in average available capacity in 2023/Q3 compared to 2023/Q2.
“Conversely, Egbin ST and Delta GS both recorded significant decreases of -19.10% and -18.85% respectively in 2023/Q3 compared to 2023/Q2.”
Cumulatively, the remaining 19 power plants, categorised as “others”, recorded 8.66 percent decrease in available capacity in Q3 2023 — compared to Q2 2023.
NERC said out of N349.55 billion billed to customers, the total revenue collected by all DisCos in Q3 this year was N267.61 billion.
“This translates to a collection efficiency of 76.56% which represents an increase of +1.02pp when compared to 2023/Q2 (75.54%),” the commission said.
The increase in collection efficiency, NERC said, can be attributed to the implementation of various collection campaigns for improved remittance by post-paid customers.