The Nigerian Electricity Regulatory Commission (NERC) has said that in the second quarter of 2023, distribution companies (DisCos) recorded 95.21% market remittance, the highest so far in 2023.
The Commission stated this in its Electricity on Demand report released today, October 17.
According to NERC, the combined upstream bill that Distribution Companies (DisCos) needed to pay was ₦194.69 billion.
This included ₦154.04 billion for generation costs from the Nigerian Bulk Electricity Trading (NBET) and ₦40.65 billion for transmission and administrative services facilitated by the Market Operator (MO).
Out of this amount, the DisCos collectively remitted a total of ₦185.36 billion (₦152.48 billion for NBET and ₦32.88 billion for the MO), leaving an outstanding balance of ₦9.32 billion.
This reflects a remittance performance of 95.21% in 2023/Q2, a significant improvement compared to the 67.43% recorded in the previous quarter, 2023/Q1.
The better remittance performance in 2023/Q2 indicates that DisCos was more successful in fulfilling its financial obligations to NBET and MO, ensuring a higher percentage of payments made in relation to the total amount due. This improvement is essential for the stability and efficiency of the electricity market.
DisCos had a collection efficiency of 75.54% in Q2/2023
According to the report, the Distribution Companies (DisCos) collected a total of ₦267 billion in revenue during Q2 2023. This performance reflects a collection efficiency of 75.54% for the quarter out of the total billing amounting to ₦354.61 billion.
Notably, this demonstrates a significant improvement of 6.79% when compared to the first quarter of 2023, where the collection efficiency stood at 68.75%.
Why DisCos recorded higher efficiency in Q2/2023
NERC said that the boost in collection efficiency can be attributed to two main factors. Firstly, DisCos have increased their metering efforts, ensuring more accurate measurement of electricity consumption.
Secondly, the DisCos have initiated various collection campaigns targeting post-paid customers, encouraging timely and complete remittances.
These combined efforts have contributed to enhanced efficiency in revenue collection, benefiting both the DisCos and the customers.
Aggregate Technical, Commercial, and Collection (ATC&C) Losses
According to the NERC report, during the second quarter of 2023, the ATC&C loss stood at 38.41%. This comprised technical and commercial losses accounting for 18.47% and collection losses making up 24.46%.
Notably, this reflects an improvement, as the ATC&C loss decreased by 7.98 percentage points compared to the first quarter of 2023, where it was 46.39%.
The positive shift in ATC&C loss can be primarily attributed to the 6.79% improvement in collection efficiency observed between the second and first quarters of 2023.
This indicates that the DisCos made progress in enhancing revenue collection efficiency during this period, thereby reducing overall losses in the distribution system.
😲 It’s really starting to feel like we’re making some positive strides in the electricity industry,..
It will be interesting to see if we can maintain this momentum in the next few quarters as more prepaid meters are distributed.
It is really starting to feel like we re making some positive strides in the electricity industry