March 2, 2024
Suit 25, Mangal Plaza, Nouakchott Street, Wuse Zone 1, Abuja- Nigeria.
ELECTRICITY

Consumers Pay N267.6bn for Electricity in 2023/Q3 – NERC

The latest report from the Nigerian Electricity Regulatory Commission (NERC) has indicated that consumers paid N267.61 billion for electricity in the third quarter of 2023.

The report released at the weekend disclosed that due to the absence of a cost-reflective tariff, the Federal Government incurred a subsidy cost of N204.59 billion over the period.

NERC revealed that the total revenue collected by all DisCos in 2023/Q3 was N267.61billion out of the N349.55 billion that was billed to customers which translated to a collection efficiency of 76.56 percent.

“The DisCos overall collection efficiency increased by +1.02pp from 75.54% recorded in 2023/Q2. This is explained by the fact that although there was a marginal difference in total collections in 2023/Q3 (-0.09%) compared to 2023/Q2 (N267.86 billion), the total billings declined by -1.42% (compared to N354.61 billion in 2023/Q2)”.

The report revealed that all DisCos except Eko and Abuja recorded improvements in collection efficiency in 2023/Q3 compared to 2023/Q2.

The commission attributed the overall increase in collection efficiency in 2023/Q3 to the implementation of various collection campaigns by DisCos to improve remittance from post-paid customers.

“The most proven method for reducing collection losses is the installation of meters (especially prepaid meters for non-maximum demand customers). Therefore, DisCos are expected to utilise one or more metering frameworks provided for in the NERC MAP and NMMP metering regulation (2021) to improve end-use customer metering in their franchise area. This will reduce commercial and collection losses and will ensure the flow of funds to upstream market participants in the sector”, it added.

The report stated that due to the absence of cost-reflective tariffs across all DisCos, “the government incurred a subsidy obligation of N204.59 billion in 2023/Q3 (average of N68.20 billion per month), which is an increase of N69.37 billion (+51.30%) compared to the N135.23 billion (average of N45.08 billion per month) incurred in 2023/Q2”.

NERC pointed out that the rise in the government’s subsidy obligation meant that “in 2023/Q3, DisCos were only expected to cover 45 percent of the total invoice received from NBET. For ease of administration of the subsidy, the MRO is limited to NBET only with the MO being allowed to recover 100% of its revenue requirement from the DisCos”.

The report disclosed that average power generation during the third quarter decreased by 4.02 percent (-176.47MW) from the 4,387.91MW recorded in 2023/Q2 to 4,211.44MW.

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