NERC: Nigerians Billed N1.18tn By Discos, Paid N841bn as Electricity Tariff in 2022

Emmanuel Addeh in Abuja

Despite the huge power undersupply challenge, Nigerians managed to pay N841 billion out of the total of N1.18 trillion tariff billed by the electricity Distribution Companies (Disco) in 2022, the Nigerian Electricity Regulatory Commission (NERC) has disclosed.

In its ‘2022 Annual Reports and Accounts’, the power sector regulator noted that the figure represented 71.02 per cent of the entire sum billed by the Discos to their customers in the year under review.

Nigeria, a country of over 200 million people still relies on between 3,500mw to 4,500mw daily, to power the homes and businesses of its citizens, despite sinking over N5 trillion into the sector since its partial privatisation in 2013.

However, the NERC Annual Reports and Accounts showed that out of the 28,351.62GWh total energy received by all Discos, 21,770.79GWh was billed to the end-users, resulting in a billing efficiency of 76.79 per cent.

This, it stated, represented a 0.22 percent increase from the billing efficiency recorded in 202,  which was put at 76.57 per cent.

Aside from the waning investment in the power sector in Nigeria, vandalism of electricity assets and power theft are also rife, while operators complain of illiquidity due to the government’s tight control of the sector.

In a separate report on Wednesday, THISDAY had put the subsidy paid on electricity by the federal government in the second quarter (Q2) 2023, at N135 billion, quoting a quarterly report from NERC.

“The total billings to electricity consumers by the Discos (in 2022) was N1,185.31 trillion of which only N841.81 billion was collected, leaving a total outstanding balance of N343.50 billion and corresponding to a collection efficiency of 71.02 per cent.

“This collection efficiency represents 1.60 per cent increase compared to 69.42 per cent, which is N775.33 billion collected out of a total bill of N1,116.93 trillion recorded in 2021,” the extant NERC report stated.

In terms of market remittance, it reiterated that the financial viability of the industry could be further assessed with the market settlement rate by Discos and special customers to the Nigerian Bulk Electricity Trading Plc (NBET) and Market Operator (MO).

According to the report, in 2022, a total invoice of N816.25 was issued to all the Discos for energy received and for service charges by the MO, out of which a sum of N632.25 billion was settled by Discos, leaving a deficit of N184 billion in the market.

This payment, it stated, translated to an overall remittance performance of 77.46 per cent, which is a 6.1 1 per cent  increase compared to the overall remittance in 2021 of 71.35 per cent.

The NERC explained that Ikeja and Eko Discos had high remittance performances of 102.04 per cent and 99.81 per cent respectively to NBET in 2022 while Kano and Kaduna achieved the lowest NBET remittance performances of 58.37 per cent and 20.21 per cent respectively.

The highest remittance performances to the market operator, the report said, were recorded by Yola and Ikeja at 98.08 per cent and 89.45 per cent respectively while Kaduna recorded the lowest MO remittance performance of 30.81 per cent in 2022.

In 2022, NERC said  the financial viability of the industry remained a major challenge, with the liquidity challenge largely driven by market shortfalls by Discos, underscored by the non-payment of 100 per cent  of their market obligations.

“The Discos were unable to pay their bills because of high ATC&C losses exacerbated by energy theft and consumers’ apathy to payments under the prevailing practice of estimated billing.

 “Another major contributory factor to high Aggregate Technical and Commercial (ATC&C) losses was the non-settlement of energy bills by Ministries, Departments and Parastatals (MDAs) across the three tiers of government.

“To address this existential liquidity challenges, Discos must continue to improve on efforts toward reducing ATC&C losses by making necessary infrastructure investments and undertaking customer enumeration and mass metering,” NERC added.

A few days ago, the Minister of Power, Adebayo Adelabu, had stated in Lagos that Nigeria would require investments worth about $262 billion to be able to achieve its ambitious target of expanding electricity generation capacity to about 30,000mw by 2030.

A recent study by the Society for Planet and Prosperity, GCA Capital Partners and Climate Advisers Network found that about 75 per cent of electricity consumed in Nigeria comes from diesel and petrol-powered generators.

Findings by the coalition indicated that about 25,000mw of power utilised in Nigeria is from diesel and petrol-powered generators, while the national electricity grid supplies less than 5,000mw.