Power firms collect N204bn, losses hit N131bn

Electricity distribution companies recorded a 76.34 per cent revenue collection rate in January 2026, generating a total of N204.74bn, even as inefficiencies across the value chain left a revenue gap of over N131bn within the same period.

Electricity customers across Nigeria also failed to pay a total of N63.46bn in bills issued by power distribution companies in January 2026, according to the Nigerian Electricity Regulatory Commission.

These disclosures were contained in the January 2026 Commercial Performance Factsheet released by NERC on Wednesday, providing fresh insight into the financial health and operational efficiency of power distribution companies.

The report showed that out of a total energy value of N336.43bn received by the DisCos during the month, only N268.20bn was billed to customers, representing a billing efficiency of 79.72 per cent, while actual cash recovered stood at N204.74bn.

This left an outstanding debt of N63.46bn, reflecting the gap between billed revenue and actual collections. Put differently, over N131bn worth of electricity value was not translated into revenue, highlighting persistent losses across billing and collection processes and ongoing liquidity challenges in Nigeria’s power sector.

The commission stated, “The total revenue collected by all DisCos in January 2026 was N204.74bn, representing a collection efficiency of 76.34 per cent.”

Further analysis showed that while the allowed average tariff stood at N124.30 per kilowatt-hour, the actual average collection was significantly lower at N85.97 per kilowatt-hour, resulting in an overall revenue recovery efficiency of 69.16 per cent.

The gap between allowed tariffs and actual collections underscores the continued strain on the electricity market, driven by factors such as energy theft, poor metering, and collection inefficiencies.

NERC noted that the overall revenue recovery efficiency declined by 8.10 percentage points compared to December 2025, while total energy received by DisCos increased by 3.16 per cent relative to the previous month.

The data revealed wide variations in performance across the 11 DisCos. Eko Electricity Distribution Company recorded the highest revenue recovery efficiency at 87.92 per cent, followed by Ikeja Electric with 81.64 per cent. Abuja Electricity Distribution Company posted 75.02 per cent, while Port Harcourt Electricity Distribution Company achieved 73.90 per cent.

Other strong performers included Benin Electricity Distribution Company with 79.32 per cent and Abuja Electricity Distribution Company at 78.09 per cent in earlier recovery assessments.

Mid-performing utilities such as Enugu Electricity Distribution Company, Ibadan Electricity Distribution Company, and Kano Electricity Distribution Company posted recovery rates ranging between 57 per cent and 68 per cent, reflecting moderate performance.

However, weaker performers included Kaduna and Jos DisCos, which recorded recovery efficiencies of 36.29 per cent and 43.54 per cent, respectively, while Yola DisCo posted 55.42 per cent.

A further analysis of the factsheet showed wide disparities in Aggregate Technical, Commercial, and Collection losses across electricity distribution companies, reflecting uneven operational efficiency in the sector.

Eko Electricity Distribution Company and Ikeja Electric led the market with strong recovery rates supported by the lowest ATC&C loss targets of 14.19 per cent and 13.54 per cent, respectively.

Abuja Electricity Distribution Company and Port Harcourt Electricity Distribution Company also posted solid recovery levels with moderate loss targets, suggesting improving but still constrained performance.

Benin Electricity Distribution Company recorded a recovery efficiency of 63.46 per cent against a 17.23 per cent loss target, indicating relatively high technical and commercial leakages despite decent collection levels.

Mid-tier performers such as Enugu, Ibadan, and Kano DisCos all had ATC&C targets above 17 per cent, highlighting persistent energy losses and weak revenue conversion.

The weakest performers—Jos Electricity Distribution Company, Kaduna Electricity Distribution Company, and Yola Electricity Distribution Company—recorded low recovery efficiencies alongside some of the highest ATC&C loss thresholds, underscoring severe technical inefficiencies, energy theft, and weak collection frameworks in their networks.

Overall, the figures show that while a few DisCos are approaching operational efficiency, the majority continue to grapple with high system losses and inadequate revenue recovery, sustaining the liquidity challenges across Nigeria’s electricity value chain.

In a move to strengthen efficiency, the commission approved a downward review of ATC&C loss targets for 2026, setting an industry average of 16.92 per cent, down from 20.54 per cent in 2025. According to NERC, the revised targets reflect expected improvements from investments made by DisCos in 2025.

“Effective January 2026, the commission approved the reduction in the ATC&C loss targets of the DisCos to reflect the expected impact of investments made,” the report stated.

Yola DisCo received the most significant reduction, with its target lowered by 15 percentage points from 44 per cent to 29 per cent, while other notable reductions included Jos, Kano, and Port Harcourt DisCos.

However, despite the revised targets, actual performance in January fell short, with the sector’s average recovery efficiency declining to 69.16 per cent. “The decrease observed in the DisCos’ revenue recovery performance in January 2026 is a result of the application of the approved ATC&C targets for 2026,” the commission added.

The figures highlight a persistent liquidity crisis in the power sector, where inefficiencies at the distribution level continue to affect the entire electricity value chain.

Nigeria’s power sector has long been challenged by high ATC&C losses, poor metering infrastructure, and weak revenue collection, despite repeated tariff reforms and regulatory interventions.

The introduction of cost-reflective tariffs and performance-based regulation was aimed at improving efficiency and financial sustainability, but implementation gaps have persisted.

The latest NERC data suggests that while some DisCos are making progress, significant structural issues remain, particularly in closing the gap between energy delivered and revenue realised.