DisCos revenue surges by 47% to hit N757bn
The Association of Nigerian Electricity Distributors’ 2021 report has said that the revenue collection by the 11 distribution companies increased by 47 per cent to N757bn in 2021.
In the association’s report on the Commercial Key Performance Indicator for its members, it said NESI’s revenue collection in 2021 set a new record of N757bn, which represented an increment of N241bn.
The revenue for 2020 was put at N516bn.
According to the report; the increment was due to the implementation of the service-reflective tariff in November 2020. There was a five percent growth in the energy delivered to the market and better performance on the Aggregate Technical, Commercial, and Collections (ATC&C) losses.
The association further said DisCos’ ATC&C losses tendency recovered from 50.3 per cent in March 2021 down to 46.7 per cent in December of the same year, reversing the downwards trend that started in 2020.
ANED said that the trend was mainly due to the minimum remittance regulations enforced by the end of 2019 that created a huge cash strain on all the DisCos. This forced them to reduce their operational costs to a minimum, with negligible investment, the COVID-19 pandemic, the tariff turmoil in September 2020 and its final implementation in November 2020 removing end-user subsidies for Band A, B and C of the customer.
The report briefly added that the 11 DisCos had benefited from the tariff increases since November 2020 and had even improved the collection efficiency from an average of 67 per cent to 69 per cent in 2021.
It, however, said the NESI’s cost-reflective average tariff which allowed DisCos to recover the cost of the service in Nigeria decreased by 5 N/kWh between 2019 and 2021 and continued to decrease in 2022, weakening DisCos’ balance sheets even more.
Several factors of note in 2021 also included the fact that the energy delivered to the market grew by five percent, the energy billed grew by nine percent and the Extraordinary Tariff Review was approved in November, removing subsidies for customers in B and A, B and C. They also increased the revenue billed by 44 per cent, making its naira equivalent reach over N1trn for the first time and collection rising by 47 percent. However, the collection efficiency performance barely increased by one percent.
Comparing the fourth quarter of 2020 with the fourth quarter of 2021, the report said revenue collection increased by N45bn or 32 percent, and collection efficiency shot up by eight points despite an 18 per cent increase in the allowed tariff.
Also, compared to the previous quarter, revenue collection increased by 7 percent to N203bn mainly due to the beginning of the dry season (more energy wheeled) and a small increase in the Allowed Tariff.
“With the negative trend starting in 2020, average ATC&C losses in 2021 improved and ended at 46.7%, reducing almost 4 points since February 2021. Remarkably, all DisCos improved their ATC&C losses in 2021,” ANED said.