Electricity distribution companies nationwide lost N25.71 billion in revenues due to inefficiency in collection in June 2024.
The Nigeria Electricity Regulatory Commission (NERC) factsheet on the performance of electricity distribution companies in June revealed that the total billing by DisCos in the month stood at N176.57 billion of which N150.86 billion was collected.
This represents a revenue collection shortfall or bill collection inefficiency of 14.56%. The bill collection efficiency by DisCos in June 2024 represents a 12.80 percentage points improvement compared to the performance in the previous month of May 2024.
Yola DisCo reported the lowest revenue collection efficiency among electricity distribution companies for the month, at 60.81%, followed by Jos and Kaduna DisCos at 62.03% and 66.46%, respectively.
In terms of revenue, Yola DisCo collected N1.87 billion, while Jos and Kaduna DisCos collected N4.96 billion and N5.01 billion, respectively.
The total, these three DisCos billed customers N18.61 billion and collected 11.84 billion resulting in a cumulative loss of N6.77 billion in revenues.
Despite recording a billing collection efficiency of 72%, Ibadan DisCo recorded the single largest loss in revenue collection in the month losing N5.8 billion in revenue for the month out of N20.82 billion billed to customers.
Losses in revenue collection by DisCos
Losses due to bill collection inefficiency have plagued the Nigerian electricity sector for years with seemingly no end in sight.
The Aggregate Technical, Commercial, and Collection (ATC&C) loss represents the total billing losses faced by DisCos due to their inability to bill 100% of the energy delivered to consumers, encompassing both technical and commercial losses.
Collection losses stem from the DisCos’ inability to collect payments for the invoices issued to consumers.
NERC emphasized that ATC&C is a key performance indicator for tariff determination, as it reflects the efficient losses that DisCos are permitted to recover from customers.
In the fourth quarter of 2023, DisCos collected N294.95 billion in revenue out of the N399.69 billion billed to customers, resulting in a total loss of N105.1 billion.
However, there was a 5.32 percentage point improvement in collection performance in the first quarter of 2024.
In Q1 2024, DisCos lost N77.03 billion due to revenue collection inefficiency- a decline from the N105.1 billion loss in the preceding month.
The total revenue collected by all DisCos in Q1 2024 was N291.62 billion out of N368.65 billion billed to customers.
This translates to a collection efficiency of 79.11%, marking an increase of +5.32 percentage points compared to Q4 2023 (73.79%).
