Yola Disco, the only electricity distribution company being controlled by the Federal Government, has recorded the highest Aggregate Technical, Commercial & Collection losses among the 11 Discos, findings have shown.
The Aggregate Technical, Commercial and Collection loss is a summation of billing losses incurred by the Disco due to its inability to bill 100 per cent of delivered energy to consumers (technical and commercial losses) and the collection losses arising from the
Disco’s inability to collect against the invoice issues out to consumers.
Data sourced by The PUNCH from an industry report, ‘Key Operational & Financial Data of NESI’ for 2019 to 2022, showed that last year, while the Disco recorded an ATC&C loss of 70 per cent, it also fell off its Multi Year Tariff Order collection target by 64 per cent.
A breakdown of what led to the loss, according to the report, was that the Disco out of the 633 gigawatts per hour received in the year under review, the utility firm was able to bill just 358GWh to customers.
Again, the Disco billed about N19bn worth of electricity to its customers, however, was able to collect N10bn in form of tariffs.
Out of the market invoice of N21bn issued, Yola Disco remitted just N4bn, failing to remit N17bn to the Nigerian Bulk Electricity Trade company.
The report puts the utility firm’s billing efficiency at 56 per cent, collection efficiency at 52 per cent, and its remittance performance at 20 per cent.
Of the 480,584 registered customers under the Disco, 87,855 or 18 per cent have so far been metered, leaving a metering gap of 392,729 or 82 per cent.
ATC&C is a critical performance-setting parameter for tariff determination because it represents the efficient losses, which the Discos are allowed to recover from customers. The MYTO makes allowance for specific ATC&C loss level targets for each Disco, which usually reduces over the course of time as investments are made with a view of reducing the efficiency losses.
The Nigerian Electricity Regulatory Commission, in its latest report in the second quarter of 2022, puts overall ATC&C losses for the 11 Discos at 45 per cent consisting of 22 per cent technical and commercial losses and 29 per cent in collection loss.
This level of ATC&C losses implies that over the course of 2022/Q2 on average, as much as N4.46 in every N10.00 worth of energy, received by a Disco was unrecovered due to a combination of inefficient distribution networks, energy theft, low revenue collection and the unwillingness of customers to pay their bills.
By way of comparison, the ATC&C losses for 2022/Q2 decreased by -3.28 per cent from the 48 per cent recorded in 2022/Q1. This decrease was largely driven by Benin (50 per cent), Enugu (48 per cent), Abuja (40 per cent), Jos (64 per cent) and Eko (24 per cent) Discos which had decreased ATC&C losses of -6.53, -6.32, -4.57, -4.20 and -3.39 per cent respectively between 2022/Q1 and 2022/Q2. The inability of most Discos to meet their allowed loss targets means they were unable to meet revenue requirements, thereby, compromising their long-term financial position.
NERC said the overall ATC&C losses of 45 per cent were significantly higher than the expected ATC&C losses (21 per cent) provided for in the MYTO for the quarter.
All Discos recorded ATC&C losses that were above their allowed targets. Kaduna, Kano, Enugu, Jos and Ibadan had the widest negative variances of 63.43, 38.12, 36.56, 36.45 and 33.87 per cent respectively relative to their allowed MYTO targets.
NERC said there was an urgent need for all the Discos to take emergency remedial actions through customer enumeration and increased revenue assurance to improve their ATC&C losses. It claimed that failure to resolve this would not only prevent the Discos from being able to meet their upstream obligations, but it would also saddle them with too much debt and erode their equity.