• Remittance performance hits 82.37% amid struggles with consumer debt
• More than half of Nigerian electricity consumers use estimated billing
By Agatha Chitumu, Abuja
The Nigerian Electricity Regulatory Commission (NERC) in a recent revelation reported that Nigeria's electricity market recorded a staggering deficit of ₦151.30 billion in 2023. This deficit arises from the shortfall in remittances by electricity distribution companies (DisCos) following an ₦858.03 billion invoice issued for energy supplied and services rendered.
The information was disclosed in NERC’s "2023 Annual Report & Accounts," which highlights a concerning trend in the country’s electricity market. Despite receiving energy worth ₦858.03 billion from the Nigerian Bulk Electricity Trading (NBET) and market operator (MO) service charges, DisCos managed to pay only ₦706.73 billion, representing a remittance performance of 82.37%.
Adding to the market's challenges, Nigerian consumers also accumulated a substantial ₦385.73 billion in unpaid electricity bills. Out of a total billing of ₦1,463.24 billion to consumers, only ₦1,077.51 billion was collected, resulting in a collection efficiency of 73.64%. This further deepens the financial woes facing the electricity market.
DisCos' Remittance Performance and Regional Variations
NERC’s report singled out Eko and Yola DisCos for their exceptional remittance performance, surpassing expectations with remittance rates of 105.76% and 105.14% to NBET, respectively. In contrast, Kaduna DisCo reported the lowest remittance performance at just 17.59%.
Regarding payments to the market operator (MO), Yola, Eko, and Ikeja DisCos led the charge with remittance rates of 90.91%, 90.85%, and 90.38%, respectively. Again, Kaduna DisCo lagged behind, with a significantly low remittance rate of 10.75%.
Metering and Customer Complaints
NERC’s report also shed light on ongoing consumer dissatisfaction, particularly in areas of metering, billing, and service interruptions. These issues made up 82.82% of the total 7,207 complaints submitted to NERC’s Customer Complaints Unit in 2023. The report noted that NERC resolved 70.31% of these complaints, amounting to 5,067 resolutions.
One of the major challenges facing Nigeria’s electricity supply industry is the low metering coverage. As of December 31, 2023, only 44.39% of the 13.16 million registered electricity consumers had been metered. In the past year, DisCos installed 672,539 new meters, with 25,847 meters under the National Mass Metering Program (NMMP), and 585,265 meters under the Meter Asset Provider (MAP) framework.
The limited progress in metering means that more than half of electricity consumers are still billed using estimates, which contributes to widespread consumer dissatisfaction and billing disputes.
The Road Ahead
NERC’s 2023 report paints a picture of a struggling electricity market, with significant financial deficits, low remittance rates, and ongoing consumer grievances. The Commission continues to push for improvements in metering, billing, and service delivery, with efforts such as the Power Outage Reporting System (PORS) allowing customers to report service interruptions in real time.
The Nigerian electricity sector faces ongoing challenges in balancing consumer needs, financial sustainability, and service quality. Addressing these issues will require increased collaboration between regulators, DisCos, and consumers to build a more robust and efficient electricity market.