April 16, 2024

Oredola Adeola

The eleven (11) electricity distribution companies (DisCos) operating in Nigeria have failed to remit a total of ₦128.26 billion for power sold to them by the market operators in the first and second quarters of 2022.

The DisCos also recorded an Aggregate Technical, Commercial, and Collection (ATC&C) loss of 46.24 percent for the period under review, thereby failing to meet targets specified in the Multi-Year Tariff Order (MYTO).

This was revealed in the first quarter(Q1,22) and second quarter(Q2,22) reports, separately released by Nigerian Electricity Regulatory Commission (NERC) and obtained by EnergyDay on Monday.

Between January and June 2022, the DisCos incurred a total debt of ₦128.26 billion comprising 69.94bn and 58.32bn for Q1, 2022 and Q2,2022 respectively, out of a total sum of 390.63bn, being combined invoices that they received from the Nigerian Bulk Electricity Traders (NBET) and Market Operators (MO) in six months (Q1,22 and Q2,22).

Meanwhile, in the NERC’s Quarterly report detailing the market remittance for Q2,22, the DisCos failed to remit a total of N58.32bn that should have been remitted to the Generating Companies and N780million to MO.

According to NERC, all the DisCos failed to meet their allowed Aggregate Technical, Commercial and Collection (ATC&C) Loss targets for the Q2,22, as specified in the MYTO.

The report further revealed that the ATC&C loss in 2022/Q2 was 44.60% comprising technical and commercial loss (21.83%) and collection loss (29.13%), adding that the ATC&C loss decreased by 3.28 pp compared to 2022/Q1 (47.88%).

It also indicated that the DisCos were unable to earn the revenue requirement upon which their approved tariffs for the period were set.

NERC noted that the persistent inability in meeting loss reduction targets could prevent DisCos from meeting their upstream market obligations, which could adversely affect their long-term financial positions.

In respect of the billing efficiency for the quarter in view, the NERC’s report showed that the total energy received by all DisCos in 2022/Q2 was 6,344.14GWh, while the energy billed to end-use customers was
4,959.53GWh, indicating an average billing efficiency of 78.17%.  This represents an increment of 0.79 pp from the 77.38% recorded in 2022/Q1.

NERC’s report on collection efficiency showed that the total revenue collected by all DisCos in 2022/Q2 was ₦188.29 billion out of ₦265.68 billion billed to customers.

This figure corresponds to a collection efficiency of 70.87% which represents a 1.53 pp increase compared to 2022/Q1 where the average collection efficiency was 69.34%.

In monetary terms, both the billings and collections reduced at almost the same rate when compared with 2022/Q1. The billing reduced by ₦30.02 billion (-10.15%) and collections reduced by ₦21.88 billion (-10.41%).

The Commission however charged the DisCos to employ technologies and operational procedures to increase both billing and collection performances, as part of measure to forestall long term financial challenges.

NERC also suggested holistic energy accounting procedures, customer and infrastructure metering, among others to be carried out by the DisCos.