NERC: Discos Earned N291.6bn, Cut ATC&C Losses by 5.7% in Q1

A new report by the Nigerian Electricity Regulatory Commission (NERC) reveals that power Distribution Companies (Discos) in Nigeria earned N291.62 billion in revenue in Q1 2024.

Simultaneously, the power sector regulator has prohibited NBET from entering into new contracts.

The latest data shows that the N291.2 billion was collected from N368.65 billion billed to customers, reflecting a collection efficiency of 79.11 percent, a 5.32 percent increase from the 73.79 percent recorded in Q4 2023.

The Aggregate Technical, Commercial, and Collection (ATC&C) Loss in Q1 2024 was 36.36 percent, which included technical and commercial loss (19.55 percent) and collection loss (20.83 percent), according to the report.

This represents an improvement of 5.75 percent compared to the 42.11 percent ATC&C loss in Q4 2023.

The ATC&C loss metric indicates how much revenue a Disco can collect relative to what it should have collected based on the energy it received and sold to customers. It measures the actual energy and revenue loss in electricity distribution.

During the quarter, Ikeja was the only Disco that recorded a lower ATC&C loss of 15.81 percent, surpassing its target of 18.73 percent, the report noted.

The inability of Discos to meet their ATC&C targets meant they could not recover the full revenues needed to provide returns to investors.

In Q1 2024, the cumulative upstream invoice payable by Discos was N114.12 billion, which included N65.96 billion for adjusted generation costs from the Nigerian Bulk Electricity Trading Plc (NBET) and N48.16 billion for transmission and administrative services by the Market Operator (MO), the report emphasized.

Of this amount, the Discos collectively remitted N110.62 billion, with N65.52 billion going to NBET and N45.10 billion to MO, leaving an outstanding balance of N3.50 billion.

According to NERC, this equates to a remittance performance of 96.93 percent in Q1 2024, compared to 69.88 percent in Q4 2023.

The average energy offtake by Discos at their trading points during the reviewed period was 3,283.87MWh/h, a decrease of 429.29MWh/h (11.56 percent) compared to 3,713.16MWh/h in Q4 2023.

Additionally, the total energy received by all Discos in Q1 2024 was 7,171.93GWh, while the energy billed to end-use customers was 5,769.52GWh, resulting in an overall billing efficiency of 80.45 percent.

This marked a 2 percent increase from the 78.45 percent recorded in Q4 2023, according to NERC.

Meanwhile, the power sector regulator has restricted NBET from entering new contracts.

This move aims to shift the electricity market towards bilateral contracts for energy and capacity between generation or trading licensees and distribution licensees, thereby limiting the federal government’s fiscal exposure to market risks.