Ikeja DisCo emerges most-efficient in September as DisCos struggle with revenue collection

Ikeja Electricity Distribution Company (Ikeja Electric) has emerged as the most efficient Nigerian DisCo in September 2024. This was disclosed by the Nigerian Electricity Regulatory Commission (NERC), in its recently-released Disco commercial performance result. 

According to the result, Ikeja DisCo recorded an efficiency ratio of 96.75 per cent, having collected N35.2 billion out of N36.38 billion billed during the month. This represented a revenue recovery efficiency of 88.55 per cent. It also means the DisCo has an actual average collection of N101.57/kWh which is below the allowed average tariff of N114.7/kWh.

Even though the collection rate represented a decline of 7.26 per cent compared to the August report, it was still enough to earn the DisCo the most efficient spot.

Fellow Lagos-based DisCo, Eko Electric Distribution Company (Eko DisCo) emerged as the second most efficient distribution company in the month, having collected N31.16 billion out of N35.28 billion billed. This means an 81.4 per cent collection efficiency, representing a slight improvement of 1.58 per cent compared to August.

The company also recorded a revenue recovery efficiency of 88.36 per cent at an average tariff of N104.56/kWh compared to the allowed average tariff of N118.33/kWh.

DisCos record revenue shortfalls despite Ikeja’s performance

Overall, the revenue collection report does not look great as distribution companies suffered a revenue shortfall of N54.22 billion in September 2024. Of the total billings of N225.8 billion, DisCos were only able to collect N171.58 billion according to the report. This represents a collection efficiency of 75.99 per cent and a 4.92 per cent decline compared to August 2024. According to the report, the shortfall could be attributed to inefficiencies in collection.

Recently, the NERC asked all electricity distribution companies in the country to replace expired prepaid meters for Nigerians free of charge. This is followed by claims that some DisCos ordered their customers to replace their Unistar meters for a certain fee.

See also: NERC orders Discos to replace prepaid meters for free

The meters are very important to revenue collection. Although the DisCos, notably the top performers; Ikeja and Eko had threatened to move non-compliant customers to estimated billing, that is probably another move to shore up their revenue collection likely by an overestimation of usage.

Regarding the collection efficiency of other DisCos, Abuja DisCo recorded a 0.71 per cent improvement from August, with an 81.35 per cent efficiency rate in September. The DisCo collected N28.28 billion from a total billing of N43.77 billion, with a revenue recovery efficiency of 83.15 per cent at N97.54/kWh, compared to its allowed tariff of N117.31/kWh.

Ibadan DisCo collected N21.99 billion from N26.1 billion billed with a recovery efficiency of 72.18 per cent. The DisCo recorded an average collection of N84.04/kWh, way below the allowed tariff of N116.43/kWh.

Benin Distribution Company recorded an 82.46 per cent collection efficiency, having collected N15.22 billion from its total billings of N18.45 billion with a recovery efficiency of 67.29 per cent.

Aba Distribution Company collected N1.43 billion out of a total billing of N1.99 billion with a revenue recovery efficiency of 85.42 per cent and a collection efficiency of 71.57 per cent. The DisCo achieved an average collection of N83.29/ kWh against the N97.50/kWh of Allowable average tariff for September.

Kano Distribution Company turned out to be the worst-performing DisCo in September as it collected N3.07 billion from total billings of N14.95 billion. The company recorded a recovery efficiency of 20.83 per cent, with an average collection of N24.14/kWh against the N115.89/kWh allowed tariff.

Yola recorded a 36.71 per cent collection efficiency, collected N1.48 billion out of N4.04 billion billed, and had a recovery efficiency of 47.35 per cent, with N56.63/kWh collected against N119/kWh allowed tariff.

Jos recorded a collection efficiency of 43.49 per cent, having collected N5.06 billion out of N11.63 billion billed with a recovery efficiency of 42.41 per cent, with an average collection of N49.07/kWh against an allowed tariff of N115.70/kWh.

Kaduna DisCo fared slightly better, with a collection efficiency of 53.73 per cent having collected N4.42 billion out of N8.22 billion billed and attained a low recovery efficiency of 35.28 per cent.