DisCos in Crisis as Consumers Refuse to Pay N348bn Electricity Bills in 9 Months
- Electricity Distribution Companies (DisCos) in Nigeria are facing liquidity crisis as consumers default in the payment
- According to NERC, electricity consumers are owing DisCos a debt to the tune of N348 billion in nine months
- This issue has led to the accumulation of trillions of naira in debt within the sector, obstructing progress in infrastructure development
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the Stock Market.
Electricity consumers across the country failed to settle a total of N348.84 billion in bills issued by the 11 Electricity Distribution Companies (DisCos).
An analysis of quarterly reports from the Nigerian Electricity Regulatory Commission (NERC) reveals that this amount forms part of the N1.53 trillion billed to customers, of which N1.18 trillion was eventually paid.
Source: UGC
The data indicates that in the first quarter of the year, customers owed N77.03 billion out of the N368.65 billion charged.
In the second quarter, unpaid bills rose to N112.48 billion from the N543.64 billion issued.
By the third quarter, the amount of unpaid bills climbed further to N159.33 billion, out of the N626.02 billion billed to consumers.
Challenge of debt in power sector
Daily Trust reports that the Nigerian Electricity Supply Industry (NESI) has faced a persistent liquidity crisis since its privatisation in 2013.
This challenge has resulted in trillions of naira in debt across the sector, hindering efforts to upgrade infrastructure.
The federal government remains the largest debtor, maintaining electricity subsidies by delaying tariff reviews for the past seven months.
Recall that Legit.ng had reported that the Chairman of the Senate Committee on Power, Senator Gabriel Suswam, had listed state governments, educational institutions and military formations as those owing huge electricity debts to DisCos.
To be more specific, the list of debtors included the Nigerian Army, Nigerian Air Force, Federal Airports Authority of Nigeria (FAAN), Central Bank of Nigeria (CBN), Defence Headquarters, Ministries of Finance, Works, Education, Women Affairs, among many others.
The Nigerian Electricity Regulatory Commission (NERC) recently disclosed that international clients, which include Benin Republic, Niger and Togo, owe Nigeria $5.7 million in electricity bills for Q4 2024.
Experts have emphasized the need for a cost-reflective tariff to reduce the sector's reliance on government funding.
Although the government approved a tariff increase for the highest electricity consumers in April, it is still projected to spend over N2 trillion on subsidy payments in 2024.
IKEDC, EKEDC upgrade customers to Band A
Meanwhile, Legit.ng earlier reported that Ikeja Electric Plc and Eko Electricity Distribution Company were permitted to incorporate extra Band A feeders into their respective networks.
The electricity distribution firms communicated these updates through individual announcements on their official social media channels.
While Ikeja Electric increased its number of Band A feeders by 34, EKEDC increased its own by thirty-three (33) more.
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Source: Legit.ng
