By Kehinde Victor
KEY POINTS
- Electricity distribution companies collected N220.93 billion in August, up 7.49% from N205.53 billion in July.
- Collection efficiency rose to 84.62%, while overall revenue recovery efficiency increased to 77.63%.
- Eko DisCo recorded the highest recovery efficiency at 96.29%, while Kaduna had the lowest at 41.90%.
MAIN STORY
Nigeria’s electricity distribution companies (DisCos) collected N220.93 billion from customers in August, a 7.49% increase from the N205.53 billion recorded in July, according to the Nigerian Electricity Regulatory Commission (NERC).
The commission disclosed this in its August factsheet, published on its X handle, which provides a breakdown of the revenue collection and operational efficiency of distribution companies across the country.
The DisCos billed customers N261.10 billion during the month and collected N220.93 billion, translating to a collection efficiency of 84.62%.
This means the companies collected about 85 naira out of every N100 billed to customers.
NERC also reported that the average allowed tariff was N130.15 per kilowatt-hour (kWh), while the actual average collection was N101.03 per kWh, representing a 3.62% increase.
The industry’s overall recovery efficiency stood at 77.63%, an improvement of 2.71 percentage points from July.
The August factsheet identified differences in performance across the distribution companies.
Eko DisCo recorded the highest recovery efficiency at 96.29%, followed by Ikeja at 84.22%, Abuja at 83.63% and Port Harcourt at 82.91%.
Kaduna had the lowest recovery efficiency at 41.90%, although this was 2.19 percentage points higher than its July performance. Jos followed at 52.80%, while Kano recorded 60.98%.
For collection efficiency, Ikeja led with 97.52%, ahead of Eko at 96.36% and Abuja at 91.91%.
Eko also recorded the highest billing efficiency at 84.49%, followed by Kano at 82.24% and Port Harcourt at 80.22%.
THE ISSUES
The figures show an improvement in the amount of electricity revenue collected by DisCos, but the gap between billing and collections remains significant.
Although the companies billed N261.10 billion in August, they received N220.93 billion, leaving N40.17 billion uncollected.
The difference between collection efficiency and recovery efficiency also matters. Collection efficiency measures how much of the amount billed is actually collected, while recovery efficiency reflects how much of the revenue requirement is recovered through collections.
The difference helps show why higher customer payments do not necessarily mean distribution companies are recovering all the revenue needed to cover their costs.
WHAT’S NEXT
The performance differences across the DisCos point to the need to examine why some companies collect and recover a much larger share of their revenue than others.
The August figures provide a basis for tracking whether the improvement in collections and recovery efficiency will continue in subsequent months.
BOTTOM LINE
DisCos collected more electricity revenue in August than in July, but the N40.17 billion gap between what they billed and what they received shows that revenue collection remains a challenge for the distribution segment.
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