N343bn billing debt, 5m customers metered… highlights of NERC 2022 report

The Nigerian Electricity Regulatory Commission (NERC) recently released its annual report and accounts for 2022, detailing records relating to its activities, funds and property.

The report captured critical projects in the sector, and unpaid underscored NERC’s challenges with unpaid electricity bills.

For instance, in the report, the commission warned that the Ajaokuta Steel Company Limited may suffer disconnection from the national grid over gross indebtedness of N25.06 billion.

NERC said failure to settle the obligation may put the steel complex and its host community at risk of being disconnected by its service providers — Nigerian Bulk Electricity Trading (NBET) Plc and market operator (MO).

Here are four highlights from the regulator’s report.

‘ELECTRICITY CONSUMERS OWED DISCOS N343.50BN BILLS IN 2022’

According to the report, the total billings to consumers by the electricity distribution companies (DisCos) was N1.185 trillion in 2022, of which only N841.81 billion was collected — leaving a total outstanding balance of N343.50 billion.

This, NERC said, represents a 71.02 percent bill collection efficiency by DisCos.

Collection efficiency is the ratio of the amount that is collected from customers compared to the amount billed to them by the DisCos.

“This translates to a collection efficiency of 71.02% which implies that for every N100.00 worth of energy billed to customers by DisCos in 2022, approximately N28.98 was not recovered from customers,” the report reads.

“The low collection efficiency combined with billing inefficiency has continued to adversely impact the financial liquidity of the industry, ultimately limiting the NESI’s ability to grow and attract investment.” 

However, in the preceding year, the commission said N775.33 billion was collected out of a total bill of N1.116 billion recorded. 

“The financial viability of the industry is further assessed with the market settlement rate by DisCos and special customers to NBET and MO,” NERC said.

DECLINE IN STABILITY OF GRID NETWORK

NERC said there was a decline in the stability of the grid network in 2022 as the number of total system collapses (total blackouts nationwide) increased relative to 2021.

“This decline in grid reliability in 2022 is further proven by the fact that the range of 1.73Hz between the average maximum and average minimum grid frequency in 2022 is higher than 1.41Hz which was recorded in 2021,” the commission said.

“While the grid reliability performance declined in 2022, overall, the network has recorded a downward trajectory in terms of number of grid incidents since 2018.” 

To maintain the trajectory of improvements in network stability, the commission said it continues to monitor the implementation of its directive to DisCos and the Transmission Company of Nigeria (TCN) to execute service level agreements (SLAs) that will ensure grid discipline.

“The commission is also exploring options for the enforcement of under frequency load-shedding scheme which has been put in place to provide an added layer of security for the grid in the case of a sudden loss of generation,” the report reads.

‘1 MILLION CUSTOMER COMPLAINTS RECEIVED IN 2022’

In 2022, NERC said all the DisCos received 1,002,998 complaints from consumers.

This is 5.78 percent more complaints than those received in 2021 (948,172), the commission noted.

According to NERC, a review of the customer complaints data indicates that metering, billing, and service interruption issues were the top categories of customer complaints, “accounting for 74.03% (742,519) of the total complaints in 2022″.

“The DisCos collectively resolved 927,722 complaints representing 92.49 percent average resolution rate,” the agency said.

“With the exception of Enugu (89.05%), Ibadan, (83.53%), and Ikeja (86.04%), all other DisCos reported above 90% complaint resolution rate in 2022.”

‘5.13 MILLION CUSTOMERS METERED IN 2022’

NERC said the total number of registered customers as of December 2022, was 12,152,106 — with 5,134,871 (42.25 percent) of them metered.

Consequently, the commission said metering rate increased by 5.79 percent from 4,691,154 in 2021.

“In 2022, 589,997 end-use customer meters were installed under the four (4) metering frameworks; Meter Asset Provider (MAP), National Mass Metering Programme (NMMP), Vendor Financed and DisCo Financed Metering,” NERC said.

“This was a 29.49% decrease compared to the 836,702 meters installed in 2021. The decrease in customer metering is attributed largely to the winding down of the NMMP phase 0.”

According to NERC, the metering gap for end-use customers remains a key challenge in the Nigeria Electricity Supply Industry (NESI), with meter deployment being a critical strategy for reducing collection losses.