Discos Post Historic Revenue of N515.68bn in Q4, Record N152bn Shortfall

Discos Post Historic Revenue of N515.68bn in Q4, Record N152bn Shortfall

CHIGOZIE AMADI

In a historic development in Nigeria’s power sector, the 12electricityDistribution Companies (Discos) operating in the country recorded N515.68 billion in revenue in Q4, 2024, a THISDAY analysis of data from the Nigerian Electricity Regulatory Commission (NERC), has shown.

This would be the highest revenue raked in by the distribution companies in any quarter, spurred mainly by the movement of about 15 per cent of Nigeria’s power consumers to the so-called Band ‘A’, where they now pay about N209.50 per kilowatt/hour of electricity, from about N63/kwh previously.

The Discos include: Benin, Kaduna, Kano, Yola, Jos, Abuja, Ibadan, Ikeja, Eko, Port Harcourt, Enugu and the most recent one, Aba Power Electric.

According to the review of the NERC data for the last three months of 2024, in October, the Discos posted a cumulative revenue of N163.07 billion from a projected N213.62 billion. In November, they raked in N174.65  billion from their revenue forecast of N216.72 billion and in December, the power distributors made N177.96 billion from supply of power to their customers.

In all, while the Discos recorded a total sum of N515.68 billion during the period under consideration, they posted a shortfall of N152 billion.

However, despite the massive improvement in their revenue, the Minister of Power, Adebayo Adelabu, last week said the electricity supply in the country was still being hindered by the continuous failure of the Discos to invest in the sector.

Adelabu, who spoke at the public presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) in Abuja, argued that with more investment in infrastructure by the Discos, additional progress would have been achieved by now.

Adelabu said the inflows attracted by the power sector last year were better than they were in 2023, explaining that their unwillingness to expand their distribution networks partly explains the low migration of more customers to Band ‘A’.

However, THISDAY notes that the revenues collected by the Discos do not belong to their coffers alone. It is shared in an agreed ratio between the power distributors, the Transmission Company of Nigeria (TCN) and the Generation Companies (Gencos), who in turn settle the gas suppliers.

Put side by side the revenues made by the Discos in other quarters of 2024, a further analysis of data from NERC, the industry regulator, indicated that the power distribution companies in the country made N291.62 billion in revenue in Q1, 2024, before the Band ‘A’ policy.

However, the N291.2 billion was out of the N368.65 billion billed to customers, translating to a collection efficiency of 79.11 per cent, and representing an increase of over 5.32 per cent when compared to 2023/Q4 of 73.79 per cent.

At the time, Aggregate Technical, Commercial and Collection (ATC&C) Loss was 36.36 per cent comprising technical and commercial loss (19.55 per cent) and collection loss (20.83 per cent), the report indicated.

In Q2, the Discos recorded the sum of N431. 16 billion as revenues from customers, reflecting a collection efficiency of 79.31 per cent, while in Q3,  they collectively recorded a total of N466.69 billion in revenue. This was an 8 per cent increase from the previous quarter.

For that quarter, a total revenue of N626.02 billion billed to customers, translating to a collection efficiency of 74.55 per cent, which was a 4.76 per cent decrease from the previous quarter and a revenue shortfall of N159.3 billion.

Despite the rise in revenue of the Discos, the federal government has already hinted that aside from the Band ‘A’ customers, other Nigerians in other bands could begin to pay more soon for electricity consumed.

However, this has received a reaction from the Nigeria Labour Congress (NLC), which has vowed to proceed with a nationwide protest if the federal government proceeds to ‘regularise’ electricity tariffs for Nigerian customers for Bands ‘A, B and C’. This was disclosed in a communique signed by NLC General Secretary Emmanuel Ugboaja last  Sunday.

Aside from the issue of illiquidity, Nigeria’s electricity supply challenges are rooted in a mix of infrastructural deficits, policy inconsistencies, and economic constraints. Despite having abundant energy resources—such as natural gas, hydro, and solar—the country struggles with inadequate generation, poor transmission networks, and inefficient distribution.

Power generation remains insufficient due to aging plants, poor maintenance, and underinvestment. Even when electricity is generated, the fragile transmission infrastructure cannot effectively distribute it across the country, leading to frequent grid collapses.

The Discos responsible for supplying electricity to consumers, also face issues of financial instability, energy theft, and low revenue collection, making it difficult to sustain operations.

Another key challenge is the reliance on an inconsistent gas supply for power generation. Nigeria has vast gas reserves, but many power plants face shortages due to poor pipeline infrastructure, vandalism, and pricing issues. Hydropower plants, on the other hand, are affected by seasonal water levels, making them unreliable during dry seasons.

As a result of these challenges, millions of Nigerians rely on expensive and polluting alternatives like diesel and petrol generators. This increases the cost of doing business, limits economic growth, and reduces the quality of life for many citizens.