By Business A.M.
The eleven electricity distribution companies (DisCos) operating in Nigeria generated an estimated N454.3 billion as billing revenue from consumers in the third and fourth quarters of 2022, according to a report by the Nigerian Electricity Regulatory Commission (NERC).
Further breakdown of the figures recorded by the Nigerian Electricity Supply Industry (NESI) in Q3 and Q4 of 2022 showed that the total revenue collected by all DisCos in the reviewed period stood at N210.67 billion out of N291.66 billion billed to customers.
The report also showed that the DisCos made an under-recovery of N170 billion out of a total of N624 billion billed to customers for both quarters, while N243.65 billion revenue was collected in the fourth quarter of 2022 out of a total of N332.28 billion.
Meanwhile, the collection efficiency within the period being reviewed stood at 72 per cent in Q3 2022 and 73 per cent in Q4 2022.
Collection efficiency is an indicator of the proportion of the amount that has been collected from customers relative to the amount billed to them by the DisCos
The Nigerian Electricity Regulatory Commission said unsatisfactory DisCos services were one of the reasons for customers’ apathy towards payment of electricity bills, adding that the situation has led to mounting commercial losses recorded by DisCos.
“A collection efficiency of 70% for instance implies that for every N100 worth of energy billed to customers by DisCos, approximately N30 remained unrecovered from the billed customers,” the commission stated.
The report, however, showed that the total collections increased by 15.65 percent compared to N210.67 billion in 2022/Q3. At a macro level, it stated that the total energy billed increased by 13.93 percent, compared to N291.66 billion in 2022/Q3) which underscores the progress recorded by the DisCos in 2022/Q4.
The report explained that the overall increase in collection efficiency in both quarters could be attributed to the increased metering by the DisCos and the implementation of various collection campaigns to improve remittance for post-paid customers.
It also noted that the 2022/Q3 to 2022/Q4 improvement in collection efficiency was largely driven by Ibadan, Kaduna and Benin whose collection efficiencies increased by 10.48, 5.66 and 5.24 percentage points respectively.
Notwithstanding, the NERC stated that the low collection efficiency performance of the DisCos poses a major threat to the financial sustainability of the Nigerian Electricity Supply Industry.
Therefore, the NERC said it intends to reinvigorate its monitoring of the various metering programmes being implemented by the DisCos e.g. the National Mass Metering Program (NMMP) funded through the Central Bank of Nigeria and the Meter Asset Provider (MAP) scheme.
Furthermore, the commission encouraged DisCos to continuously evaluate options for improving the optimisation of their energy delivery in line with the Service Based Tariff (SBT) regime thereby ensuring sufficient energy is supplied to customer groups/clusters with the highest collection efficiencies.
Concerning the MAP scheme, the Commission directed DisCos to undertake increased Customer enlightenment about the programme. On its own part, the commission disclosed that it is finalising the mechanism for the implementation of the customer refund. It explained that refunding customers is likely to increase customer appetite to finance meter deployment under the MAP programme.