Nigeria: Discos' Revenue Collection Hits N121.32 Billion in Q2

12 December 2019

The 11 electricity Distribution Companies (Discos) collected N121.32 billion revenue out of the total N186.08 billion bills they issued to consumers in the second quarter of 2019.

According to the second quarter 2019 report of the Nigerian Electricity Regulatory Commission (NERC), the distributors recorded 80.18 per cent and 69.10 per cent billing and collection efficiency respectively, indicating 0.20 per cent and 5.11 per cent points increases respectively from the first quarter of 2019.

NERC said that the level of collection efficiency during the quarter under review indicated that as much as N3.09 out of every N10 worth of energy sold during the second quarter of 2019 still remained uncollected as and when due.

"During the quarter under review, the total billing to electricity consumers by the 11 Discos rose to N186.08billion with a total collection of N121.32 billion."

NERC noted that similarly, during the second quarter of 2019, out of the total invoice of N180.08 billion issued to the 11 Discos for energy received from NBET and for service charge by MO, the sum of N55.10billion of the total invoice was settled, representing 30.60 per cent remittance performance, and 2.83 percentage points increase from the first quarter of 2019.

The average total remittance performance to the market for all Discos was 30.60 per cent and ranges from 13.12 per cent (Jos) to 43.27 per cent (Eko), according to the commission.

Despite the slight progress recorded in the second quarter of 2019, NERC said that the financial viability of the Nigerian Electricity Supply Industry (NESI) is still a major challenge threatening its sustainability.

The report recalled that as highlighted in the preceding quarterly reports, the liquidity challenge is partly due to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft and consumers' apathy to payments under the widely prevailing practise of estimated billing.

The commission pointed out that "the severity of the liquidity challenge in NESI was reflected in the less than 50 per cent settlement rate of the energy invoice issued by NBET and Market Operator (MO) to each of the Discos highlighted above, as well as the non-payment by the special and international customers."

NERC said that to sustain the improvement in the grid stability in subsequent quarters and beyond, the Commission, in collaboration with TCN, shall continue to intensify its monitoring and supervision efforts to ensure strict compliance with the System Operator's directives to generators on free governor and frequency control mode in line with the provisions of the extant operating codes in the industry.

The report added that the Commission is reviewing the outcome of the process of procuring spinning reserves by TCN.

The Commission had earlier approved the request by TCN to competitively procure spinning reserves for the industry to guarantee adequate spinning reserves for proper management of the grid by System Operator.

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