Discos Bill N243.97bn Electricity, Collect N192.27bn in Revenues in Two Months

Emmanuel Addeh in Abuja

Electricity Distribution Companies operating in Nigeria billed a total sum of N243.97 billion to their customers in January and February, but were only able to collect N192.27 billion during the period under review.

A THISDAY review of data released by the Nigerian Electricity Regulatory Commission (NERC) showed that in January, while the power distributors’ billing was valued at N130.92 billion, they got N95.26 billion as revenue.

This represented a 72.76 per cent collection efficiency, according to NERC, with the data showing a dip of 0.36 per cent in efficiency compared to the previous month of December.

In January, total energy received was 2,577.6 GWh, while the total energy billed was 2,072.01 GWh, representing a billing efficiency of 80.39 per cent.

In terms of revenue recovery performance, the NERC’s commercial performance data of Discos indicated that allowed average tariff for the month was N59.89/kWh, even as actual average collection was N36.97, indicating a recovery efficiency of 61.73 per cent.

Operators in the power industry have consistently blamed the illiquidity in the sector, mostly occasioned by shortfalls in billing collection for the thinning investment in the Nigerian power sector.

On the other hand, electricity consumers believe they are over-billed and that they actually pay for ‘darkness’ when they are billed for unreliable power supply, especially those on the estimated billing platform.

In April, NERC hiked tariff for premium power consumers by over 200 per cent, triggering calls for reversals by many Nigerians.

The 11 Discos in the country have also recently blamed powerful and wealthy Nigerians for being partly responsible for the current illiquidity in the power sector in Nigeria.

Spokesman of the power distributors under the Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, argued that many rich Nigerians bypass their metering devices, even when they have the capacity to pay for the kilowatts they use.

Despite ‘efforts’ by succeeding governments since 1999, Nigeria’s power sector has continued to totter, facing an acute cash shortage, which experts say could lead to its imminent collapse.

Although Nigeria’s power sector has witnessed a 219 per cent increase in liquidity over the past nine years, reaching N900 billion in 2023, from about N282 billion in 2015, Discos have complained this is not enough to trigger a marked developmental shift in the industry.

But in January, the NERC data showed that Ikeja Disco had the highest revenue collection of N17.61 billion, out of N20.13 billion worth of bills sent out to customers, to record a billing efficiency of 87.35 per cent.

This was followed by Eko Disco, which billed N21.24 billion, but was able to collect N16.30 billion, representing a collection efficiency of 76.71 per cent.

Abuja Disco sent power valued at N19.02 billion to its franchise areas, but got N15.55 billion as revenue for the month, showing a collection efficiency of 81.76 per cent.

The Discos with the least revenue collection for the month were Yola, with N1.99 billion, recording a collection efficiency of 43.95 per cent, Kaduna Disco with N3.24 billion and Jos Disco with N3.88 billion total revenue for the month.

However, in February, all the Discos billed N113 billion to customers, but got a total revenue collection of N97.01 billion for the month, implying an overall billing efficiency of 81.83 per cent, and collection efficiency of 85.8 per cent.

The difference between total bill sent out compared to the total collection in January and February this year showed a deficit of 23.7 per cent, meaning that for both months, the Discos, on the average, were able to fetch 76 per cent of the entire bill sent out.

Revenue collection for the Discos were also highest among the top three power distributors during the month of February, with Ikeja Disco collecting N19.58 billion, followed by Abuja with N16.28 billion and Eko Disco’s N15.71, as the Disco hit a very high collection efficiency of 99.24 per cent during the month.

However, metering still remained a major problem in the sector, with 13.23 million registered customers in January, but only just 5.88 million of that number metered, representing a 44.48 per cent metering rate.

Still on the metering situation, Ikeja Disco had a rate of 72.64 per cent, followed by Abuja’s 60.69 per cent and Eko’s 58.3 per cent metered customers in January.

But in March, this moved to 73.22 per cent for Ikeja Disco, 61.09 per cent for Abuja Disco and 59.20 per cent for Eko Distribution Company, with overall metering rate for the sector being 44.79 per cent.

During the month, the number of total registered customers was 13.3 million while total metered was 5.98 million. Metering also took the meat of the complaints by customers for that month, with 55 per cent, followed by billing complaints of 9.04 per cent and complaints over service interruption of 8.69 per cent.

In an insight document on electricity metering published by the Energy Markets Rates and Consultants (EMRC) in 2023, it noted that there were several reasons why metering gaps exist in Nigeria.

This is despite efforts by the government and its partners to close the gap through the National Mass Metering Programme (NMMP) and the Meter Asset Providers (MAP) scheme. 

One, it said that many consumers are typically reluctant to adopt the installation of meters due to concerns about capital cost, perceived inconvenience, and apprehensions about transitioning to a new billing methodology.

It added that many consumers lack awareness about the advantages of precise metering, their rights in the process, and the role it plays in promoting efficient energy consumption.

Besides, it said inadequate enforcement of metering mechanisms creates complexities in the electricity-metering sector and discourage private investments in metering infrastructure.

It also blamed corrupt practices for the slow pace of meter deployment, including misappropriation of funds designated for new meters and imposition of unauthorised fees on customers.

However, generally, customers complain that meters are scarce, as many Nigerians who have paid for the devices are yet to get delivery in their homes and business premises.