The Nigerian Electricity Distribution Company (NERC) has stated that revenue generated by the 11 electricity distribution companies (DisCos) increased by 48 per cent in the second quarter of 2024.
The increase was due to the hike in electricity tariff for Band A customers which NERC stated was necessitated due to the rising cost of electricity generation that would have pushed the federal government’s subsidy payment to over N2trn by the end of the year.
The regulator in its second quarter report stated that the DisCos revenue moved from N291.62bn in the first quarter of 2024 to N431.16bn in the second quarter.
The report added that the N431.16bn revenue collected represented 79.31 per cent of the N543.64bn that was billed to customers.
It stated that the revenue collection performance of all DisCos indicated that Ikeja and Eko disCos recorded the highest collection efficiencies of 94.67 per cent and 88.03 per cent respectively. Conversely, Yola DisCo recorded the lowest collection efficiency of 55.67 per cent.
The report added that the federal government paid N380.06bn as subsidy due to the absence of cost-reflective tariffs across all DisCos.
It said the subsidy is an average of N126.69bn per month which is 52.51 per cent of total invoice payable to the Nigerian Bulk Electricity Trading (NBET) invoice.
“The total subsidy obligation of the government was reduced by N253.24bn from N633.30bn.
“The significant decrease in the subsidy obligation of the FGN is a result of the policy directive of the government to implement reviews of tariffs charged to Band A customers while the tariffs for Band B-E customers remain frozen at the rates payable since December 2022,” NERC said.
It added that remittances made by the four international bilateral customers being supplied by GenCos in the NESI made a payment of $9.81m against the cumulative invoice of $15.60m issued by the Market Operator for services rendered, translating to a remittance performance of 62.88 per cent.
“The domestic bilateral customers made a payment of N1.29bn against the cumulative invoice of N1.99bn issued to them by the MO for services rendered in 2024/Q2 translating to 65.07 per cent remittance performance.
“It is, however, noteworthy that some bilateral customers (both domestic and international) made payments during 2024/Q2 for outstanding MO invoices from previous quarters. Cumulatively, the international bilateral customers paid a total of $16.65m; Transcorp-SBEE and Mainstream-NIGELEC have made payments towards all outstanding invoices from previous quarters.
“Similarly, the MO received N1.3bn from the domestic bilateral customers towards outstanding invoices from previous quarters; Mainstream Energy Solutions has made payment towards all outstanding invoices from previous quarters.”
Daily Trust
