DisCos Lose ₦653bn in 12 Months as Electricity Bills Rise by 12.9%

Nigeria’s electricity distribution companies (DisCos) recorded a total of ₦653.19 billion in losses in their revenue collections over 12 months.

This is even as electricity billing rose by 12.9 per cent from ₦466.69 billion in the third quarter of 2024 to ₦706.61 billion in the same period of 2025.

Quarterly reports released by the Nigerian Electricity Regulatory Commission (NERC) show that between October 2024 and September 2025, 11 electricity DisCos consistently recorded revenue losses. This comes at a time when the power sector continues to grapple with a liquidity crisis that threatens the stability of the nation’s power supply chain.

NERC reports show that the DisCos collectively lost ₦148.56 billion in the fourth quarter of 2024, ₦190.64 billion in the first quarter of 2025, ₦177.63 billion in the second quarter of 2025 and ₦136.36 billion in the third quarter of 2025, bringing the total for the period to ₦653.19 billion.

The latest quarterly report released by the NERC indicates that the value of the total energy offtaken by all the DisCos in Q3 2025 was ₦854.53 billion, but the value of the total energy billed was ₦706.61 billion. This means the DisCos cumulatively recorded billing losses of ₦147.92 billion in Q3 2025.

The report attributed it largely to commercial losses, including energy theft and poor energy accounting. Out of the ₦706.61 billion that was billed to customers, the DisCos collected a total revenue of ₦570.25 billion. This translates to a collection efficiency of 80.70 per cent.

When compared to the previous quarter (Q2 2025), the total revenue collected by all DisCos was ₦564.71 billion out of the ₦742.34 billion billed to customers, which translated to a 76.07 per cent collection efficiency.

This means that at an aggregate level, DisCos recorded a 4.63 percentage point increase in collection efficiency between 2025/Q2 and 2025/Q3.

Experts have observed that revenue losses by the DisCos threaten the stability of the entire power sector value chain. Despite recent improvements in collection efficiency, the sector remains in a liquidity crisis that prevents essential upgrades of power infrastructure.

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The Q3 2025 report reveals that the Aggregate Technical, Commercial, and Collection (ATC&C) loss stood at 33.27 per cent.

Though the ATC&C loss decreased by 4.65 percentage points compared to 37.92 per cent in Q2 2025, the electricity regulator noted that it was 12.73 percentage points higher than the 2025 MYTO target (20.54 per cent) and translates to a cumulative revenue loss of ₦108.753 billion across all DisCos.

A look at the NERC quarterly reports shows that the Nigerian power sector operates on a system where DisCos collect money from consumers and remit upstream to pay for transmission and generation. When DisCos lose revenue, the effects ripple backward.

Persisting Electricity Subsidy Burden

The Federal Government has continued to bear the burden of subsidising the cost of electricity.  The latest NERC quarterly report indicates that the federal government incurred ₦458.75 billion as an electricity subsidy obligation in the third quarter of 2025.

This is even a decline from the ₦514.35 billion recorded in the second quarter this year. It stood at ₦471.69 billion in the fourth quarter of 2024 and surged to ₦536.4 billion in the first quarter of 2025.

NERC explained in the Q3 2025 report that the subsidy is being maintained because of the absence of cost-reflective electricity tariffs across all customer categories (bands), making what is being generated far below the actual cost.

Debts owed to GenCos

Because DisCos cannot collect 100 per cent of their bills, they are unable to pay Generation Companies (GenCos) in full.  As of December 2025, GenCos were owed over ₦4 trillion in debt. The Executive Secretary of the Association of Power Generation Companies (APGC), Dr Joy Ogaji, had, in an interview last year, lamented that the outstanding debts owed to GenCos are affecting their operations, such as the inability to pay gas suppliers. This has led to frequent gas constraints, where power plants are forced to shut down or reduce output because they lack fuel, directly causing widespread blackouts.

READ ALSO: Nigerian Govt Incurs ₦3trn Electricity Subsidy in 18 Months 

In an attempt to resolve the lingering debt, the government, in late 2025, launched a massive bond programme to settle the legacy debts owed to GenCos and gas suppliers. The bond instruments included cash and non-cash allocations earmarked for settling outstanding liabilities, backed by the national budget and supported by financial market participation. The efficiency of this approach is still being debated as the implementation continues.

Stalled Metering

Poor cash flow or illiquidity has also made DisCos continue to struggle with closing the metering gap. According to NERC, as of 30 September 2025, only 6.6 million out of over 12 million registered electricity customers (55.37 per cent) were metered across the 12 DisCos in Nigeria.

This means about 5.3 million customers remain unmetered. This forces them to rely on estimated billing, which further reduces customer trust and lowers the willingness of people to pay their bills, creating a vicious cycle of loss.

An energy analyst at the Lagos-based Centre for Development Studies, Aisha Mohammed, emphasised the need for DisCos to improve their collection efficiency to ensure the financial viability of the power sector.

“The DisCos need to significantly improve their collection efficiency to ensure the financial viability of the power sector,” Mohammed stated.

Also, the National Secretary of the Nigeria Electricity Consumers Advocacy Network (NECAN), Uket Obonga, stressed the need for concerted efforts by the authorities to close the metering.

Obonga emphasised that metering all electricity customers would significantly improve revenue collection and curb cases of mistrust that arise between DisCos and consumers due to the estimated billing system.