Nigeria: “Power Sector Challenges: Over 7 Million Customers Face Estimated Billing as Metering Deficit Persists”
By Ahmad Hadizat Omayoza, Mamos Nigeria
In the ongoing discourse surrounding the power sector’s plea for the Federal Government to cease electricity tariff subsidies, a concerning revelation has surfaced: more than seven million customers within the power sector lack access to electricity meters, leaving them subject to estimated billing from distribution companies (DisCos).
The absence of meters not only hampers customers’ ability to manage their energy consumption effectively but also places them at the mercy of estimated bills, a situation that has garnered attention amid the broader discussions on the future of electricity tariffs.
According to recent data from the Nigerian Electricity Regulatory Commission (NERC), as of September 30, 2023, there were a total of 12,825,005 registered electricity customers in the Nigerian Electricity Supply Industry (NESI). However, only 5,707,838 customers, constituting 44.51 percent, have access to meters. The third-quarter report from NERC further outlined that 148,389 end-user customers were metered during this period.
Noteworthy is the distribution of meter installations across different DisCos, with Ikeja, Abuja, and Ibadan leading the pack, accounting for 27.35 percent, 20.78 percent, and 17.53 percent of total installations in 2023’s third quarter, respectively.
Complicating matters, the power industry is grappling with significant financial challenges, as highlighted by NERC’s projection that subsidies payable to the sector by the government will exceed N600 billion by the year’s end. Looking ahead, the Commission anticipates a potential surge in electricity subsidies to N1.6 trillion in 2024 if a cost-reflective tariff is not implemented.
In response to the industry’s precarious financial state, Mr. Adetayo Adegbemle, the Convener and Executive Director of PowerUp Nigeria, expressed skepticism about the sustainability of government payments for electricity subsidies. He emphasized that the historical practice of subsidizing electricity costs has become a considerable burden, exacerbated by factors such as inflation and the devaluation of the Naira, which have negatively impacted existing tariffs.
The freeze in the Multi-Year Tariff Order (MYTO) review in July, coupled with economic challenges, raises concerns about the industry’s financial outlook in the coming year. Adegbemle warned that the evolving circumstances may further strain the already fragile financial stability of the market.
As the power sector grapples with these complex issues, the need for a comprehensive and sustainable solution becomes increasingly evident. The challenges surrounding metering and subsidies underscore the urgency for strategic interventions to ensure a reliable and financially viable electricity supply for all stakeholders involved.