By Akinyemi Precious
According to the Q1 2023 Electricity report from the Nigerian Electricity Regulatory Commission (NERC), it was made known that Electricity Distribution Companies (DisCos) collected only N247.09 billion in revenue out of the N359.38 billion billed to customers in the first quarter of 2023.
The report revealed that the DisCos cumulative collection efficiency reduced by 4.58 percentage points (pp) from 73.33 per cent in 2022/Q4 to 68.75 per cent in Q1/2023 and a collection efficiency of 68.75 per cent for the highlighted period.
“While the total collections increased by 1.41 per cent (compared to N243.65 billion in 2022/Q4), the total energy billed increased by 8.15 per cent (compared to N332.28 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,” a part of the report stated.
This however stated that the overall decline in collection efficiency in the first quarter of 2023 could be attributed to the decline in metering electricity consumers.
Previously, NERC had stated that metered customers in the country, stood at 5.31 million in Q1 2023, indicating a growth of 3.61 per cent 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.
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 per cent compared to 77.31 per cent in 2022/Q4 (a -9.69-pp change).
It noted that the low collection efficiency is a major threat to the Nigerian Electricity Supply Industry (NESI)’s financial sustainability.
To tackle these, 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.
NERC stated that the 32.37 per cent 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.