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By Daniel Adaji
Electricity Distribution Companies (DisCos) recorded N147.92 billion in billing losses in the third quarter (Q3) of 2025.
This happened despite the Federal Government injecting N459.75 billion in electricity subsidies to freeze tariffs, a new report by the Nigerian Electricity Regulatory Commission (NERC) has shown.
NERC disclosed this in its Q3 2025 electricity market report, released on Tuesday, highlighting persistent revenue leakages in the power sector even amid heavy government intervention.
The regulator said the government retained end-user electricity tariffs at July 2024 levels to stabilise the market amid rising generation costs and weak remittances from international bilateral electricity consumers. Without this support, total generation costs would have risen to about N782.45 billion during the quarter.
As a result of the intervention, the Nigerian Bulk Electricity Trading Plc (NBET) invoice payable by DisCos dropped to N323.70 billion. However, NERC noted that the relief failed to prevent losses at the distribution level.
According to the report, total energy billed by DisCos stood at N706.61 billion, representing a billing efficiency of 82.69 per cent, up from 81.61 per cent in Q2 2025. Still, the gap between energy offtake and billing resulted in cumulative billing losses of N147.92 billion.
DisCos collected N570.25 billion out of the N706.61 billion billed, yielding a collection efficiency of 80.70 per cent, an improvement from 76.07 per cent in the previous quarter.
Despite these gains, overall market efficiency remained weak. NERC said the weighted average Aggregate Technical, Commercial and Collection (ATC&C) loss across all DisCos stood at 33.27 per cent, exceeding the 2025 Multi-Year Tariff Order (MYTO) target of 20.54 per cent by 12.73 percentage points. This translated to a revenue loss of N108.75 billion, although the figure improved from 37.92 per cent recorded in Q2 2025.
The losses comprised technical and commercial losses of 17.31 per cent and collection losses of 19.30 per cent. Only Eko and Ikeja DisCos met their ATC&C targets, while Kaduna DisCo performed worst with an actual loss of 71.10 per cent, against a target of 21.32 per cent.
On market remittances, DisCos were billed a cumulative upstream invoice of N400.48 billion, made up of N323.70 billion payable to NBET and N76.77 billion for transmission and administrative services to the Market Operator (MO). They remitted N381.29 billion, leaving an outstanding balance of N19.18 billion and a remittance performance of 95.21 per cent.
International electricity sales remained a weak spot. NERC said international bilateral customers paid only $7.125 million out of the $18.69 million invoiced, a remittance rate of 38.09 per cent. By contrast, domestic bilateral customers paid N3.19 billion out of N3.64 billion billed, achieving 87.61 per cent remittance.
The commission also flagged continued complaints around the government’s band-based tariff system, which requires customers with longer daily supply to pay higher tariffs but has drawn criticism over poor service delivery.
Reacting to the figures, electricity analyst and head of the Electricity Consumer Protection Advocacy Centre, Princewill Okorie, questioned the effectiveness of the subsidy regime.
“Subsidy payment is growing, and market efficiency is not top-notch despite privatisation. The regulator must continue to look into the activities of distribution companies to ensure transparency and accountability in their metering and billing processes,” Okorie said.
NERC said that while DisCos recorded marginal improvements in billing and collection, persistent losses and weak international remittances continue to weigh heavily on the financial health of Nigeria’s electricity market.