July 1, (THEWILL)- In an ironic twist of events, the number of estimated customers of Nigeria’s electricity distribution companies (DisCos) maintained an upward trend in the first three months of the year (Q1 2024), while the firms recorded higher revenue with less power supply compared with their performance in the equivalent period of 2023.
Estimated customers refer to the system of arbitrary charging against unmetered electricity consumers for the volume of energy they did not actually consume. The billing is based on perceived pattern of consumption, or on the ‘best of judgment’, with unjustified high revenue targets as the motive. Consumers in this system are mandated to pay far above what they consumed on a monthly basis and the charges are usually outrageous
The National Bureau of Statistics (NBS) said in its latest electricity report that estimated customers of the DisCos during Q1 2024 were 6.43 million, higher by 10.22% from 5.83 million in Q4 2023.
According to NBS, on a year-on-year basis, estimated customers increased by 7.88% in Q1 2024 from 5.96 million in Q1 2023.
A look into the NBS electricity reports for 2023 showed that on a year-on-year basis, estimated-billing customers increased by 2.58% in Q2 2023 to 6 million from 5.85 million in Q2 2022
Estimated customers during the 2023 third quarter were 6.03 million, higher by 0.53% from 6.00 million in Q2 2023. On a year-on-year basis, estimated customers increased by 2.02% in Q3 2023 from 5.91 million in Q3 2022.
Estimated customer system has remained a controversy in Nigeria’s electricity sector as a result of the notorious process it entails.
“Estimated billing is a system that thrives on corruption and is driven by tardy inclination to exploitation which defines a commodity in the category of monopoly,” said Gabriel Madu, an electrical installations contractor.
While the unmetered customers who bear the brunt of a corrupt and inefficient system bleed, the DisCos, record an increase in their revenue.
Revenue generated in the reference period rose by 17.91% from N247.33 billion generated in Q1 2023 to N291.62 billion. While this could include outstanding debts, the figure shows that the DisCos’ business model earns them a value against the disadvantage suffered by their customers, amid the nation’s unresolved epileptic power supply including frequent national grid collapse.
The country recorded three cases of national grid collapse in the first half of 2024. It also witnessed a national grid collapsed three consecutive times in 2023 – with attendant huge economic losses as the entire nation is thrown into a spate of darkness;
The latest NBS report also showed that the DisCos supplied less energy in the Q1 2024 period when their estimated customers and revenue recorded an increase.
“Electricity supply was 5,769.52 (Gwh) in Q1 2024 from 6,432.22 (Gwh) in the previous quarter. However, on a year-on-year basis, electricity supply decreased by 1.41% compared to 5,851.87 (Gwh) reported in Q1 2023”, the report stated.
THEWILL reports that the Nigerian Electricity Regulatory Commission (NERC) announced on June 21 2024, the approval of N21 billion for the 11 DisCos to provide meters for end-use customers at zero cost.
This comes on the heels of years of exploitation of electricity consumers who waited unavailingly for the supply of meters even after they had made the prescribed payments for the facility yet remained unmetered long thereafter.
Since the Federal Government introduced the metering system in 2018, it has maintained that electricity consumers face no hurdles in procuring meters. But that remains far from being the truth. The DisCos are raking in enormous revenue from poor services while their estimated customers continue to increase and groan.
The latest NBS report showed that Ibadan Electricity Distribution Company (IBEDC) has 1.33 million estimated customers – the highest among the 11 DisCos.
Ibadan also belongs to the league of top four revenue generating DisCos: Ikeja (IEDC) with N52.29 billion, Eko (EKDC) N43.29 billion, and Abuja (AEDC), which raked in N43.22 billion.
The Ibadan zone (which covers Oyo, Ogun, Osun, Kwara and parts of Niger, Ekiti and Kogi states) pooled N27.41 billion to rank fourth during the period.
THEWILL recalls that the Nigerian Electricity Regulatory Council (NERC) announced an upward adjustment of electricity tariff in April 2024. It said the increase would see the customers paying N225 instead of the current N66 kilowatt per hour.
Some stakeholders have instituted legal actions against NERC aimed at restraining it from implementing the new tariff regime.
Federal High Court sitting in Lagos has restrained Ikeja Electric Plc and Nigerian Electricity Regulatory Commission (NERC) from applying, administering or implementing the purported tariff in April Supplementary Order on Tariff Increase on “Bank A” Feeders.
Nigeria has the lowest access to electricity globally, with about 92 million persons out of the country’s 200 million population lacking access to power, according to the Energy Progress Report 2022 released by Tracking SDG 7.
The report, produced in conjunction with the International Energy Agency, International Renewable Energy Agency, United Nations Statistics Division, the World Bank and the World Health Organisation, indicated that Nigeria was followed by the Democratic Republic of Congo’s 72 million, Ethiopia’s 56 million and Pakistan’s 54 million access deficits.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
