DisCos rake N454.3bn revenue in 2022

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The eleven electricity distribution companies (DisCos) raked in N454.3 billion as billing revenue from consumers in the third and fourth quarter of 2022, a report has revealed.

This puts the collection efficiency within the period being reviewed at 72 and 73 percent respectively.

Collection efficiency is an indicator of the proportion of the amount that has been collected from customers relative to the amount billed to them by the DisCos.

Again, out of a total of N624 billion billed to customers for both quarters, the DisCos made an under-recovery of N170bn.

A breakdown of the figures according to the 2022 third quarter reports of Nigerian Electricity Supply Industry (NESI) made available by the Nigerian Electricity Regulatory Commission (NERC) revealed that the total revenue collected by all DisCos in 2022/Q3 was N210.67 billion out of N291.66 billion billed to customers.

Also, in 2022 fourth quarter, the total revenue collected by all DisCos 2022 was N243.65 billion out of N332.28.

The electricity regulator said unsatisfactory DisCos services were one of the reasons for customers’ apathy towards payment of electricity bills, adding that: “This has led to mounting commercial losses recorded by DisCos.

“A collection efficiency of 70% for instance implies that for every N100 worth of energy billed to customers by DisCos, approximately N30 remained unrecovered from the billed customers.”

Cumulatively, the report, however, states that DisCos’ collection efficiency improved by 1.1 percentage points from 72.23 percent in 2022 Q3 to 73.33 percent in Q4 same year.

“While the total collections increased by 15.65 percent compared to N210.67 billion in 2022/Q3. At a macro level, the total energy billed increased by 13.93 percent, compared to N291.66 billion in 2022/Q3) which underscores the progress recorded by the DisCos in 2022/Q4.

The report stated that the overall increase in collection efficiency in both quarters could be attributed to the increased metering by the DisCos and the implementation of various collection campaigns to improve remittance for post-paid customers.

“Notwithstanding, the low collection efficiency performance of the DisCos poses a major threat to the financial sustainability of the NESI. Therefore, the Commission intends to reinvigorate its monitoring of the various metering programs being implemented by the DisCos e.g. the National Mass Metering Program (NMMP) funded through the Central Bank of Nigeria and the Meter Asset Provider (MAP) scheme.

“Furthermore, DisCos must continue to evaluate options for improving the optimisation of their energy delivery in line with the Service Based Tariff (SBT) regime thereby ensuring sufficient energy is supplied to customer groups/clusters with the highest collection efficiencies,” it stated.

It also noted that the 2022/Q3 to 2022/Q4 improvement in collection efficiency was largely driven by Ibadan, Kaduna and Benin whose collection efficiencies increased by 10.48, 5.66 and 5.24 percentage points respectively.

Meanwhile, by 31st December 2022 at 31st 12,152,106 customers had been registered out of which 5,134,871 have been metered.

By Q4, a total of 164,617 electricity customers were already metered, making an increase of 21,725 installations compared to the 142,887 meters installed in Q3 same year.

Out of the 142,887 meters installed for end users in Q3, 24,017 were metered under the NMMP scheme while 118,870 customers were metered under the MAP intervention

In Q4, from 164,612 meters installed for end users in 2022/Q4, 3,831 and 160,114 were under the NMMP and MAP intervention while 667 customers were metered under the Vendor Financed scheme.

“The MAP and NMMP continue to provide the clearest path for mass customer metering. On NMMP, the Commission is actively engaged with the CBN, World Bank and other relevant stakeholders to accelerate the financial close and funds disbursement for the next round (Phase One) of the NMMP.

“On MAP, the Commission has directed DisCos to undertake increased Customer enlightenment about the program. On its own part, the Commission is finalising the mechanism for the implementation of the customer refund – it is expected that when customers are refunded, it could increase customer appetite to finance meter deployment under the MAP program,” it said.

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