FG pays N36bn electricity subsidy in Q1 2023 – NERC

A National grid facility
A National grid facility
FG pays N36bn electricity subsidy in Q1 2023 – NERC

In the first quarter of 2023, the Nigerian Electricity Regulation Commission (NERC) disclosed that the federal government disbursed a sum of N36 billion to subsidize electricity consumption.

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This amount was equivalent to N12 billion per month and was paid to the Nigerian Bulk Electricity Trading (NBET), the entity responsible for collecting revenues due to generation companies and the Transmission Company of Nigeria from the Distribution Companies (DisCos).

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The total invoice given to the DisCos during the period was N209.2 billion, out of which N141.5 billion was paid to the NBET.

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Meanwhile, the DisCos managed to collect N247 billion in revenue from customers, which fell short of the N359.3 billion billed to consumers.

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The breakdown of payments from individual DisCos indicated that Abuja DisCo paid N20 billion from its N32.8 billion invoice, Benin DisCo paid N14.4 billion from the N17.8 billion billed, Eko Disco paid N19.4 billion from the N22.8 billion charged, and Enugu DisCo paid N15.72 billion from its N20 billion invoice.

Additionally, Ibadan Disco paid N17.5 billion out of its N24.5 billion invoice, Ikeja DisCo paid N29.6 billion from the N35.9 billion given to it, Jos Disco paid N7 billion out of the N8.8 billion billed, Kaduna DisCo paid N1.8 billion from the N15.3 billion invoice, Kano paid N6.1 billion from its N15 billion, Port Harcourt DisCo paid N8.5 billion from the N14.5 billion billed, and Yola Disco paid N899 million from the N1 billion invoice.

The reason behind the government’s intervention in subsidizing electricity was attributed to the “absence of cost-reflective tariffs.” Consequently, the government decided to cover the gap between the cost-reflective tariffs and the allowed tariff through tariff shortfall funding, which was applied to the NBET invoices to be paid by the DisCos.

Metering Progress and Safety Incidents

As for metering progress, a total of 171,107 meters were installed in the first quarter of 2023.

Out of these, 5.80 percent were metered under the National Mass Metering Programme (NMMP) scheme, 92.71 percent of customers were metered under the Meter Asset Provider (MAP) intervention, while 1.47 percent and 0.02 percent were metered under the Vendor Financed and DisCo Financed schemes, respectively.

However, the report also highlighted safety concerns, with 85 reports received from licensees during the same period. These reports revealed 33 incidents that resulted in 16 injuries and 17 fatalities.

The root causes of these incidents were identified as “illegal/unauthorized connections, unsafe conditions/acts, wire snaps, vandalism, explosions, electrocutions, fire outbreaks, vehicular collisions, and falls from height.” NERC assured that investigations were initiated into all reported incidents, and relevant actions would be enforced against licensees where necessary.

Most Common Customer Complaints

Regarding customer complaints, the DisCos received a total of 249,683 complaints during the first quarter of 2023. Among these complaints, the most frequently reported issues were related to metering (47.66 percent), billing (22.72 percent), and service interruption (9.22 percent). These three complaints collectively accounted for over 79 percent of the total complaints received.

The Nigerian government’s subsidy payment of N36 billion in the first quarter of 2023 aims to address the challenges posed by the absence of cost-reflective tariffs.

As metering progress continues, the government, NERC, and DisCos are working to ensure safe and reliable electricity services for customers. Nonetheless, it is crucial for the authorities to tackle the identified safety concerns and effectively address the most common customer complaints to improve the overall electricity distribution landscape in the country.


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