Power Sector Challenges Persist: Nigerian Discos Achieve 79% Billing Efficiency in Q3, but ATC&C Losses Remain a Concern

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The Nigerian Electricity Regulatory Commission (NERC) has released its Q3 quarterly report, revealing that Electricity Distribution Companies (Discos) collected N267.6 billion from customers during the period. Despite achieving a billing efficiency of 79%, the report highlights challenges in the power sector, including an increase in Aggregate Technical, Commercial, and Collection (ATC&C) losses, signaling the need for sustained efforts to address systemic issues.

Key Points:

  1. Billing Efficiency and Collection Performance:
    • Discos achieved a billing efficiency of 79%, collecting N267.6 billion from customers in Q3.
    • The total energy billed to end-users was 5,682.11GWh, indicating a decrease in billing efficiency compared to Q2 2023.
  2. Revenue Collection and Efficiency Improvement:
    • Total revenue collected by all Discos in Q3 was N267.61 billion out of N349.55 billion billed, showing a collection efficiency of 76.56%.
    • The increase in collection efficiency is attributed to various collection campaigns targeting improved remittance by post-paid customers.
  3. Power Sector Challenges:
    • Nigeria’s power sector continues to face challenges, supplying only about 4,000MW to over 200 million citizens.
    • The government acknowledges that individual Nigerians generate up to 40,000MW through the use of generators, contributing to environmental pollution.
  4. ATC&C Losses and Sector Dynamics:
    • The ATC&C loss during Q3 was 39.45%, comprising technical and commercial losses of 20.91% and collection loss of 23.44%.
    • ATC&C losses increased by 1.04% compared to Q2 2023, impacting each Disco’s revenue collection and their ability to finance sustainable long-term operations.

Conclusion: While the Q3 report highlights some positive aspects, such as billing efficiency improvement and increased revenue collection, challenges persist in Nigeria’s power sector. The sector faces hurdles such as ATC&C losses, inadequate investment, illiquidity, non-cost reflective billing, and disruptions in gas-to-power supply. Addressing these systemic issues is crucial for the industry’s sustainable growth, operational efficiency, and the provision of reliable power to meet the needs of the Nigerian population. The report emphasizes the need for continued efforts to overcome these challenges and build a resilient power sector.

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