DisCos gulp N1.3trn from electricity bills in 23 months

An estimated 12.792 million registered consumers paid at least N1.367 trillion as charges for power supply to them by the 11 Distribution Companies (DisCos) within 23 months – from November 2020 to September 2022.

According to an analysis of data published by the Nigerian Electricity Regulatory Commission (NERC), the customers owe N590.6billion as debt of the entire N1.958trillion during the period.

The Nigerian Electricity Market (NEM) has experienced a huge liquidity crisis with over N1.7 trillion market shortfall. The billing and revenue collection were done according to customers’ bands with those in Band A (customers with over 20 hour daily electricity supply) getting the highest billing of N748.9billion and the highest revenue collection of N623.1billion accounting for about 45 per cent of the generated revenue. The customers however had N125.8billion as unpaid bills.

Band C (12 hours supply) had the second most billed customers with N412.5billion and the 11 DisCos receiving N255.5billion from the bill as N157billion was unpaid.

The third most billed customers were those on Band B  (16 hours supply) with N377.1billion bill but the consumers paid N268.3billion leaving N108.8billion unpaid bill.

Band D (eight hours) customers received N289.4billion bill but paid N158.6billion with N130.8billion as outstanding. N129.7bn was billed to customers under Band E (five hours supply) but this group of electricity users paid N61.9billion for the 23 months and had a debt of N67.8billion to pay to the 11 DisCos.

The lowest customer category is the ‘Lifeline’ (mostly in rural areas) getting N801.3 million bill for the 23 months but ended up paying N450.5million, and owing N350.8million.

According to the Multi Year Tariff Order (MYTO) 2022, this set of customers who are considered to be poor, are cross-subsidised by payments from the five other customer categories.

While the billing for the five categories of electricity consumers grew significantly in 2022 from the figures earlier, the revenue collection also improved.

Analysis of the average billing trend shows that customers on Lifeline paid N15.29 per kilowatts hour (kwh) in 2022 being the lowest hourly billing but they paid N7.58/kwh and N8.24/kwh in 2021 and 2022 respectively.

The bill for band A reached N62.95/kwh in 2022 being the highest charge but customers paid about N52.38/kwh leaving a N10.57 shortfall for every one hour of electricity consumption.

Band E customers that have a lower power supply of just five hours daily got N37.93/kwh in 2022 and paid N18.52/kwh leaving a N19.41/kwh hourly debt.

Generally, consumers were billed an average of N52.74/kwh in 2022 but paid N37.45/kwh as the power firms could not get a difference of N15.29/kwh for every hour of electricity supplied to the over 12m customers for most of last year.