An analysis of the Nigerian Electricity Regulatory Commission (NERC) quarterly report reveals that electricity consumers failed to pay N280.98bn to Distribution Companies (DisCos) from January to September 2023. This outstanding amount is part of the N1.06trn bill issued to consumers.
Breaking down the figures, N112.29bn remained unpaid from the N359.38bn bill in the first quarter, N86.75bn from the N354.61bn bill in the second quarter, and N81.94bn from the N349.55bn bill in the third quarter. Meanwhile, the federal government disbursed N375bn as a subsidy during this period due to the absence of cost-reflective tariffs.
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NERC explains that the subsidy covers the gap between the cost-reflective and allowed tariff, with the DisCos obligated to cover a specified amount based on their Minimum Remittance Obligation (MRO). In Q3 alone, the government incurred a subsidy obligation of N204.5bn, witnessing a significant increase compared to the previous quarter.
This surge in subsidy payment is attributed to the government’s policy to harmonize Nigeria’s exchange rate. Notably, none of the four international customers Generation Companies (GenCos) made payments from the cumulative invoice of $11.16m, and bilateral customers also made no remittances against the cumulative invoice of N2.81bn.
In a related development, the Transmission Commission of Nigeria (TCN) announces a reduction in power supply across the country due to the maintenance shutdown of the Egbin Power station, the largest in West Africa.
The shutdown will last for three days, resulting in a 676MW reduction in bulk power generated into the nation’s grid. This will affect power delivery to distribution companies’ load centers nationwide during the maintenance period.
