By Abubakar Yunusa
Uncollected revenue of the electricity Distribution Companies also known as the DisCos deepened by a whopping N60 billion in December 2024, further aggravating the liquidity challenges being faced by the firms.
Statistics culled from the Nigerian Electricity Regulatory Commission (NERC) revealed that the utility companies were unable to retrieve a total of N60.25 billion from customers in December 2024 out of N238.21 billion billed them for electricity.
This translates to N177.96 billion in revenue collected during the period under review, a collection efficiency of just 74.71 per cent.
As of 2024/Q3, total revenue collected by all DisCos in 2024/Q3 was N466.69 billion out of N626.02 billion billed to customers. This translates to a collection efficiency of 74.55%, representing a decrease of -4.76pp compared to 2024/Q2 (79.31%).
The spokesperson for the DisCos umbrella body, the Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan had severally argued how the inability to collect billed revenue impacts the entire electricity value chain.
According to him, low operating cash 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.
The weighted average ATC&C loss across all the DisCo in 2024/Q3 was 39.10% comprising – technical and commercial loss (18.32%) and collection loss (25.45%). The ATC&C loss increased by +4.40pp compared to 2024/Q2 (34.70%).
The Nigerian Electricity Regulatory Commission (NERC) said “No DisCo achieved its target ATC&C as provided in the MYTO during the quarter.”
The worst underperformance relative to the target ATC&C was recorded in Kaduna DisCo (Actual – 70.84% vs. target – 25.00%).
According to NERC, the significant under-recovery of the invoices issued to customers by DisCos is driven by a lack of willingness of customers to pay bills when due, unsatisfactory DisCos’ services and inadequate customer metering, among other challenges.
Adebayo Adelabu, minister of power, recently disclosed the federal government’s plan to restructure the DisCos, citing the unwillingness of companies to invest in the sector.
The lack of investment, he said, is affecting their capacity to deliver quality service, hindering adequate power supply to electricity customers across the country.
“This is why we are going to focus on the DisCos this year and carry out a lot of restructuring, a lot of reforms in the DisCos. They are not ready to make more investments. And the balance sheet is not healthy to even attract debts from the finance sector,” he said.
As the federal government’s restructuring plan for the DisCos progresses, reports recently broke that the Lagos State government has taken over the regulatory function of the Ikeja Electricity Distribution Company (IKEDC) and the Eko Electricity Distribution Company (EKEDC).
Last year, the country also witnessed the transfer of regulatory oversight of the Electricity Market in Kogi State from the NERC to the Kogi State Electricity Regulatory Commission (KSERC). Some other DisCos were also affected.
With lingering liquidity challenges, analysts warn of the looming takeover of other power distribution companies by the government.
“This level of revenue loss is unsustainable,” stated Aisha Mohammed, an energy analyst at the Lagos-based Centre for Development Studies. “The DisCos need to significantly improve their collection efficiency to ensure the financial viability of the power sector.”
Never miss a moment! Get the stories shaping Nigeria, delivered straight to your phone. Follow Peoplesdaily Newspaper on WhatsApp for breaking news, exclusive reports, and the headlines everyone will be talking about, before anyone else.
