Electricity: DisCos’ revenue collection rises 30% to N782.74bn

Despite the persistent challenges of epileptic power supply across the nation, the latest data from revenue collection (NERC) reveals a notable 30% increase in revenue collection by eleven electricity distribution companies (DisCos) during the first nine months of 2023. The collection amount reached N782.74 billion, surpassing the N598.13 billion collected in the corresponding period of 2022.

Additionally, the data indicates a three-percentage-point improvement in collection efficiency, rising to 73.6% in the first nine months of 2023 compared to the 70.12% recorded in the same period in 2022. On a monthly basis, September 2023 witnessed a 9.9% increase in revenue collection, reaching N94 billion, compared to N85.51 billion in August 2023.

Despite the enhanced collection efficiency, NERC data highlights a rise in revenue shortfall by DisCos to N503.13 billion for January to September 2023, compared to N268.31 billion during the same period in 2022. This, coupled with the government’s decision to freeze electricity tariff increases, has led to an increase in electricity subsidies, estimated at around N600 billion for 2023 and a projected N1.6 trillion for 2024.

The escalating situation has prompted calls for the removal of electricity subsidies and the establishment of a cost-reflective tariff for the market. Chairman of the Energy Consumers Association of Nigeria, Chijoke James, expressed concern over the focus on revenue without corresponding improvements in service quality.

Meanwhile, stakeholders in the Nigerian Electricity Supply Industry (NESI) emphasized the need for NERC to implement a fair and cost-reflective tariff structure that encourages investment, ensures revenue sufficiency, and promotes efficient energy consumption. The stakeholders also called for the expansion of smart meter deployment to enhance billing accuracy and reduce electricity theft.

In response to the financial state of the industry, the Convener and Executive Director of PowerUp Nigeria, Mr. Adetayo Adegbemle, cautioned that the government’s ability to sustain electricity subsidies is doubtful. He pointed out the historical pattern of subsidy payments and the challenges posed by rising inflation and the devaluation of the Naira, which may exacerbate the financial situation in the market in the coming year.