Electricity distribution companies (DisCos) collected only ₦247.09 billion in revenue out of the ₦359.38 billion billed to customers in the first quarter of 2023.
This is according to the Q1 2023 Electricity report from the Nigerian Electricity Regulatory Commission (NERC).
According to the NERC report, this translates to a collection efficiency of 68.75% for the highlighted period.
The report also highlighted the fact that the DisCos cumulative collection efficiency reduced by 4.58 percentage points (pp) from 73.33% in 2022/Q4 to 68.75% in Q1/2023.
A part of the report stated:
- “While the total collections increased by 1.41% (compared to ₦243.65 billion in 2022/Q4), the total energy billed increased by 8.15% (compared to ₦332.28 billion in 2022/Q4). The 2022/Q4 to 2023/Q1 decline in collection efficiency was largely driven by Ibadan, Yola, Kaduna, and Abuja whose collection efficiencies decreased by 15.50 pp, 10.20 pp, 8.49 pp and 5.29 pp respectively.
- “Conversely, only Jos DisCo recorded improved collection efficiency of 4.48 pp.”
According to the NERC report, the overall decline in collection efficiency in the first quarter of 2023 could be attributed to the decline in metering electricity consumers.
NERC had previously noted that metered customers in the country, stood at 5.31 million in Q1 2023, indicating a growth of 3.61% from 5.13 million recorded in the preceding quarter.
Although, the Q1/2023 NERC report stated that DisCos will continue to implement various collection campaigns to improve remittance for post-paid customers.
It noted that the low collection efficiency is a major threat to the Nigerian Electricity Supply Industry (NESI)’s financial sustainability.
So, to address the challenge, the Commission plans to enhance its monitoring of metering programs, such as the National Mass Metering Program (NMMP) funded by the Central Bank of Nigeria and the Meter Asset Provider (MAP) scheme, being implemented by the DisCos.
It is important to note that following the implementation process of the NMMP Phase II World Bank-funded supply of 1.2 million smart energy meters to the country, the Manufacturers Association of Nigeria (MAN) warned that the World Bank-funded phase II of the NMMP displaces local Nigerian meter producers and negates CBN guidelines.
Same old shortfalls
According to the Q1/2023 NERC report, the average remittance performance to the Nigerian Bulk Electricity Trading (NBET) Plc in the highlighted period was 67.62% compared to 77.31% in 2022/Q4 (a -9.69-pp change).
NERC stated that the 32.37% that was not remitted to NBET poses a challenge to the sector.
This is because the shortfall translates to generation companies’ (GenCos) underpayments which could affect their ability to finance critical maintenance activities required for sustaining generation availability.
Recall that a key power sector source had told Nairametrics in July, that without cost-reflective tariffs, GenCos cannot carry out the necessary system overhauls mandated by the multi-year tariff order (MYTO) every four years.
Meanwhile, these overhauls are essential to maintain the efficiency and continuous operation of gas-fired power plants.
