SAN FRANCISCO, October 27, (THEWILL) – The Nigerian Electricity Regulatory Commission, NERC has said that the efficiency of revenue collection process by the 11 electricity Distribution Companies (DISCO) decreased considerably in the first quarter of 2020. It also disclosed that a total of N114.29 billion was collected in revenue.
The quarterly report said that Abuja, Benin and Eko DISCOs were most efficient in the revenue collection process.
The regulatory agency noted that the collection efficiency implied that for every N10 worth of energy billed to customers by the Discos in the first quarter of 2020, approximately N3.88 remained unrecovered from customers as and when due.
The latest NERC report which covered the first quarter of 2020 also showed that the country generated more electricity compared to the last quarter of 2019 with total electricity generated put at 8,613,998MWh, 6.33% more than the energy generated during the preceding quarter.
While reiterating that financial viability of industry has remained a major challenge threatening its sustainability, NERC noted that as highlighted in the preceding quarterly reports, the liquidity challenge is partly due to the non-implementation of cost-reflective tariffs.
The Commission also listed high technical and commercial losses exacerbated by energy theft and consumers’ apathy to payments under the widely prevailing practice of estimated billing as part of the challenges of the industry.
“It was noteworthy that the payment cycle for March invoices fell sharply within the period of the outbreak of Covid-19 pandemic. The total revenue collected by eleven (11) Discos from customers in the first quarter of 2020 stood at N114.29billion out of the total bill of N186.82billion. Similar to the observed trend in billing efficiency relative to the preceding quarter, the Discos’ collection efficiency (i.e. the total revenue collected as a ratio of the total billing by Discos) declined in 2020/Q1.
“The overall collection efficiency for all Discos decreased to 61.18% in the first quarter of 2020 representing 8.26% points decrease from the 69.44%t collection efficiency recorded in 2019/Q4”, NERC said.
It added that the “collection efficiency implies that for every N10 worth of energy billed to customers by Discos in the first quarter of 2020, approximately N3.88 remained unrecovered by customers as and when due. This low collection efficiency combined with billing inefficiency has continued to adversely impact the financial liquidity of the industry, which in turn, has led to low investment in NESI.
“During the first quarter of 2020, the total electric energy generated was 8,613,998MWh – 6.33% more than the energy generated during the preceding quarter. Within the same quarter, the industry recorded a peak daily generation of 5,268MW.”
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