DisCos collect N603.64bn as N141bn revenue gap exposes powe

Nigeria’s electricity distribution companies collected N603.64 billion from customers in the second quarter of 2026, leaving a N141.03 billion gap against the value of electricity they billed, as metering shortfalls and revenue recovery weaknesses continued to undermine the financial sustainability of the power sector.

The 11 distribution companies (DisCos) billed customers N744.67 billion for electricity consumed during the quarter but recovered only 81.06 per cent of the amount, according to the Nigerian Electricity Regulatory Commission’s (NERC) second-quarter 2026 Operational and Commercial Performance Report.

The figures expose a persistent weakness in the electricity market: despite the substantial amounts generated from customers, billing inefficiencies and incomplete revenue collection continue to constrain the cash available across the power supply chain.

The problem extends beyond customer payments. The DisCos remitted N385.44 billion, representing 93.92 per cent of the N410.38 billion invoiced to them by the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator for electricity procurement, transmission and related market services.

Of the amount paid, N306.62 billion went to NBET, while N78.82 billion was remitted to the Market Operator. The companies ended the quarter with outstanding obligations of N24.94 billion.

Although the remittance rate remained high, it slipped slightly from 94.08 per cent in the first quarter, indicating a marginal deterioration in payment performance.

The wider concern is whether the electricity market can consistently convert power supplied to consumers into sufficient revenue to meet obligations to generators and other market participants, while also financing investment in infrastructure.

Metering remains a major obstacle. NERC reported that the DisCos installed 350,270 additional meters during the quarter, bringing the total number of metered customers to 7.74 million out of 12.59 million active registered customers.

The national metering rate consequently stood at 61.51 per cent at the end of June, leaving approximately 4.85 million active customers without meters.

The gap matters because inadequate metering can weaken billing accuracy, complicate revenue recovery and fuel disputes between customers and distribution companies. Expanding metering is therefore central to improving transparency and ensuring that electricity consumption translates more reliably into revenue.

The report also showed that grid-connected power plants operated at a plant load factor of 90 per cent, with average hourly output of 4,022.40 megawatt-hours per hour.

The figures highlight the importance of financial performance across the entire electricity value chain. Even where generation is available, weaknesses in billing, collections and remittances can restrict the cash needed to sustain operations and support further investment.

For Nigeria’s economy, the consequences extend to manufacturers, small businesses and households. A financially weak electricity market struggles to attract the investment needed to improve supply, while unreliable power forces businesses to spend more on diesel and petrol generators, raising production costs and consumer prices.

The latest NERC figures therefore point to a challenge that goes beyond increasing electricity tariffs or generation capacity. Improving metering, billing efficiency and collections will be essential to ensuring that money paid by consumers supports a more financially sustainable electricity industry.