Concerns as Eko DisCo, Kaduna DisCo, Others Fail to Collect N60 Billion From Customers
- The 12 energy DisCos in Nigeria failed to collect more than N60 billion in power bills in December 2024, according to data from NERC
- The industry's stability and ability to provide customers with reliable electricity are called into question by this significant income imbalance
- Only 74.71 per cent of the total amount owed has been collected, leaving a sizable N60.25 billion shortfall
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Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
A report by the Nigerian Electricity Regulatory Commission (NERC) has shown that the 12 electricity distribution firms (DisCos) were unable to collect over N60 billion in power bills in December 2024.
Source: Getty Images
This information was included in the fact sheet that the commission published for the month that was being examined.
This substantial income deficit raises questions regarding the industry's stability and capacity to supply customers with dependable electricity.
According to the document, DisCos only collected N177.96 billion from customers for the electricity they used in December, even though they billed them N238.21 billion.
With a collection effectiveness of only 74.71 percent, a significant N60.25 billion deficit remains uncollected.
The data also demonstrates how different each DisCo's performance is. Notably, a number of DisCos reported collection efficiencies that were lower than the national average, pointing to serious difficulties in collecting taxes.
Aisha Mohammed, an energy analyst at the Lagos-based Centre for Development Studies stated:
“This level of revenue loss is unsustainable. The DisCos need to significantly improve their collection efficiency to ensure the financial viability of the power sector.”
The whole power value chain is impacted by the failure to collect billed income. It restricts how much the DisCos can spend on network maintenance, infrastructure improvements, and energy purchases from generating firms (GenCos).
The quality and dependability of the electrical supply to customers are eventually impacted by this.
The study states that in December, DisCos received 2,705.86 GWh of electricity and billed 2,257.83 GWh to customers, yielding an overall billing efficiency of 83.44 percent. DisCos' capacity to precisely meter and bill consumers is on the rise, as evidenced by the 0.11 percent increase from November 2024.
The outlook of income collection, however, is less promising. DisCos only collected N177.96 billion of the N238.21 billion in total billings, yielding a collection efficiency of 74.71 percent.
Even though this represents a 5.88 percent improvement over the previous month, there is still a sizable discrepancy between money that was billed and revenue that was collected.
The actual average collection was N82.50 per kWh, which represents a recovery efficiency of 71.01 percent, although the average authorized tariff for December was N116.18 per kWh. This indicates that, according to established rates, DisCos are only recouping about 71% of the money they are entitled to.
Upon deeper examination, the data shows notable differences in each DisCo's performance. With the highest billing and collection efficiency of 89.03 and 91.50 percent, respectively, Eko DisCo stands out.
Ikeja DisCo also performs well, as seen by its 83.41 percent billing efficiency and 80.71 percent recovery efficiency.
Source: Getty Images
On the other hand, several DisCos are having trouble recovering their revenue. For instance, Aba DisCo has a recovery efficiency of 45.91 percent, whereas Kaduna DisCo only has 31.87 percent.
These poor recovery rates point to possible problems with metering and invoicing accuracy as well as difficulties with customer payment compliance.
The relative performance change in comparison to November 2024 is another point of emphasis in the NERC study. The most notable change in billing efficiency was Yola DisCo, which had a rise of 10.74 percent.
In contrast, the data also shows that some DisCos saw a drop in performance from the prior month.
Tinubu urges Nigerians to manage electricity
Legit.ng reported that President Bola Ahmed Tinubu told Nigerians that it is not negative to learn how to manage their resources.
Tinubu said Nigerians should learn to switch off their lights to manage their electricity bill.
According to The Nation, he stated this during his first presidential media chat on Monday, December 23.
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Source: Legit.ng
