DisCos lost N8bn revenue in February, says NERC

Nigeria’s electricity distribution companies recorded a paradoxical performance in February 2026, as improved efficiency metrics failed to translate into stronger revenues, exposing lingering weaknesses in the power sector’s commercial framework.

A new commercial performance factsheet released by the Nigerian Electricity Regulatory Commission on Tuesday has revealed that while billing, collection, and recovery efficiencies improved compared to January 2026, actual billings and cash collections declined, raising fresh concerns about liquidity across the Nigerian Electricity Supply Industry.

According to the report published on the official X handle of the commission, data from the regulator indicated that total energy received by the 11 DisCos rose to N277.09bn in February, representing a 17.64 per cent increase from January’s N235.53bn.

It said, “Total energy received by all DisCos stood at N277.09bn, representing an increase of 17.64 per cent compared to January 2026.

However, despite receiving more energy, the DisCos billed only N242.29bn, a 9.66 per cent drop from January’s estimated N268.08bn, pointing to continued gaps in energy accounting and customer enumeration.

Billing efficiency improved to 87.44 per cent, up 7.72 percentage points from 79.72 per cent in January, suggesting better conversion of energy received into invoices, even as total billings declined.

Despite the drop in billings, the regulator said operational performance improved, adding that “billing efficiency increased to 87.44 per cent, reflecting a 7.72 percentage point improvement over the previous month.”

On revenue collection, the report stated that “the total revenue collected by DisCos in February 2026 was N196.68bn, representing a decline of 3.94 per cent compared to January.”

It, however, emphasised that “collection efficiency improved to 81.17 per cent, up by 4.84 percentage points, indicating better conversion of billed energy into cash collections.”

The commission further highlighted gains in tariff realisation, stating that “the actual average collection per kilowatt-hour increased to N100.27, representing a 16.64 per cent improvement compared to January 2026.”

This, it said, pushed recovery performance upward, noting that “overall revenue recovery efficiency rose to 80.67 per cent, an increase of 11.51 percentage points month-on-month.”

The report added that “the allowed average tariff for the period was N124.30/kWh, indicating that a gap still exists between cost-reflective tariffs and actual collections.”

Providing a breakdown across utilities, the Commission stated that “Eko, Kano, and Abuja DisCos recorded the highest billing efficiencies at 97.20 per cent, 99.04 per cent, and 93.70 per cent, respectively.”

Conversely, it noted that “Yola and Kaduna DisCos recorded the lowest billing efficiencies at 66.09 per cent and 72.46 per cent respectively.”

On collections, the report said “Eko DisCo led with 94.12 per cent collection efficiency, followed by Abuja at 89.28 per cent,” while “Kaduna DisCo recorded the lowest collection efficiency at 49.27 per cent.”

In terms of cost recovery, the commission disclosed that “Eko DisCo achieved a recovery efficiency of 100.67 per cent, exceeding the allowed tariff benchmark,” while “Kaduna DisCo recorded the weakest recovery performance at 41.20 per cent.”

An analysis of the figures shows that compared to January, energy received rose by N41.56bn (17.64 per cent), Billings fell by N25.79bn (9.66 per cent), and Collections declined by N8.09bn (3.94 per cent).

This indicates that although DisCos are becoming more efficient operationally, the sector is still grappling with weak demand, collection losses, and customer liquidity constraints.

The commission also disclosed that “reduced ATC&C loss targets averaging 16.64 per cent have been approved for 2026 to reflect the expected impact of DisCo investments made in 2025.”

It added that the February performance “demonstrates gradual improvements in commercial efficiency, though significant gaps remain in revenue realisation across the industry.”

The development underscores a persistent contradiction in Nigeria’s power sector: efficiency improvements are not yet translating into financial stability.

The situation may continue unless there is wider metering coverage, improved power supply, stronger enforcement against energy theft and better alignment of tariffs with consumer affordability.