At least five electricity distribution companies supplied a disproportionate share of power to less commercially viable and poorly accounted feeders in the third quarter of 2025, according to the latest industry performance report released by the Nigerian Electricity Regulatory Commission.
The affected DisCos—Benin, Kaduna, Ibadan, Yola, and Port Harcourt—recorded significant negative variances between their Billing Efficiency and Energy Accounting Efficiency, a key regulatory metric used to track how electricity is allocated across customer bands under the Multi-Year Tariff Order.
This imbalance resulted in electricity distribution companies losing an estimated N147.92bn to billing inefficiencies in the third quarter of 2025.
In its Q3 2025 Nigerian Electricity Supply Industry report, analysed by The PUNCH on Monday, NERC explained that under the MYTO framework, electricity is expected to be allocated fairly across customer bands—Bands A to E—while maintaining consistent accounting efficiency.
Where this occurs, the variance between billing efficiency and energy accounting efficiency should remain within a ±2 percentage-point tolerance limit.
The report stated: “Billing efficiency of a DisCo is a measure of the ratio of the naira value of energy billed by the DisCo to customers relative to the naira value of the total energy supplied to a given area over a period.
“The key drivers of billing losses are technical—energy loss along the distribution network—and commercial—DisCos’ inability to account for 100 per cent of energy supplied. Commercial losses could arise from theft by customers, such as meter bypass, or other factors under the DisCo’s control, including poor customer enumeration and the proliferation of inaccurate meters.
“It is expected that if DisCos allocate energy across bands (Bands A–E) as stipulated in the MYTO framework issued by the commission, while also maintaining consistent EAE across the bands, the variance between BE and EAE should be minimal, that is, within a ±2pp limit.
“Consequently, if a DisCo records a BE–EAE variance greater than +2pp, it indicates that energy allocation was skewed towards feeders that are more commercially viable and/or have high energy accounting efficiency. Conversely, if a DisCo records a BE–EAE variance less than –2pp, it indicates that energy allocation was skewed towards feeders that are less commercially viable and/or have poor energy accounting efficiency.”
NERC added that only Jos DisCo met this benchmark, recording a variance of +1.71pp, indicating balanced energy allocation and consistent accounting efficiency across its feeders.
Five other DisCos recorded significant positive variances, suggesting that electricity supply was skewed towards commercially viable feeders and high-paying customers. These included Ikeja DisCo (7.52pp), Abuja DisCo (7.39pp), Eko DisCo (10.13pp), Enugu DisCo (9.35pp), and Kano DisCo (12.69pp).
However, Port Harcourt (-3.60pp), Yola (-11.66pp), Benin (-26.18pp), Kaduna (-18.28pp), and Ibadan (-16.88pp) DisCos posted deeply negative BE–EAE variances, indicating that their energy delivery was skewed towards less commercially viable feeders or areas with weak energy accounting systems.
The report showed that Benin DisCo recorded the worst performance, with a BE–EAE variance of –26.18 percentage points, followed by Kaduna (-18.28pp), Ibadan (-16.88pp), Yola (-11.66pp), and Port Harcourt (-3.60pp).
Despite a modest improvement in industry-wide billing efficiency, which rose to 82.69 per cent in Q3 2025 from 81.61 per cent in the preceding quarter, NERC warned that persistent energy misallocation and weak accounting practices deepen liquidity challenges, worsen revenue shortfalls, and increase reliance on government intervention.
The commission reiterated that expanding metering coverage, strengthening revenue protection, and aligning energy allocation with the MYTO framework remain critical to restoring financial sustainability in the power sector.
Data from the report showed that the naira value of energy off-taken by all DisCos stood at N854.53bn in Q3 2025, while the total amount billed to customers was N706.61bn, translating to an aggregate billing efficiency of 82.69 per cent.
This represented a 1.08 percentage-point improvement over the 81.61 per cent recorded in Q2 2025, when DisCos off-took N909.59bn worth of energy but billed customers N742.34bn.
Billing efficiency measures a DisCo’s ability to convert electricity delivered to customers into billable revenue. For instance, a billing efficiency of 70 per cent implies that for every N100 worth of electricity supplied, only N70 is successfully billed, with the remainder lost to technical and commercial factors.
NERC explained that billing losses stem from technical losses along distribution networks and commercial losses, including meter bypass, illegal connections, faulty meters, and weak energy accounting systems.
Despite the overall improvement, the disaggregated performance of individual DisCos revealed wide disparities, underscoring persistent structural challenges in the sector.
Eko Electricity Distribution Company recorded the highest billing efficiency at 99.18 per cent, indicating near-total conversion of supplied energy into billed revenue. In contrast, Benin DisCo posted the weakest performance at 60.68 per cent, meaning nearly N40 of every N100 worth of electricity delivered was not billed.
