Despite the implementation of the Band ‘A’ tariff regime, the Federal Government paid ₦458.75 billion in electricity subsidies to operators across the power value chain in the third quarter of 2024, according to the latest report by the Nigerian Electricity Regulatory Commission (NERC).
NERC’s quarterly report revealed that electricity distribution companies (Discos) collected ₦570.21 billion out of the ₦706.61 billion billed to customers between July and September 2024.
The commission attributed the subsidy to the continued freeze on certain end‑user tariffs at July 2024 levels, despite rising generation costs. It added that Discos recorded marginal improvements in billing and collection efficiency during the period.
According to the report, the total naira value of energy offtake by all Discos stood at ₦854.53 billion, while billing efficiency improved to 82.69 per cent, up from 81.61 per cent in Q2 2025. However, cumulative billing losses amounted to ₦147.92 billion.
Collection efficiency rose to 80.70 per cent, representing an increase of 4.63 percentage points from 76.07 per cent recorded in the previous quarter.
NERC noted that the absence of cost‑reflective tariffs continues to necessitate government intervention through subsidies to bridge the gap between allowed and actual generation costs. As a result, the government incurred a subsidy obligation of ₦458.75 billion, representing a ₦55.59 billion (10.81 per cent) reduction compared to ₦514.35 billion in Q2 2025.
The subsidy accounted for 58.63 per cent of total Gencos’ invoices, slightly lower than the 59.60 per cent recorded in the previous quarter, reflecting reduced energy offtake and a marginal decline in generation costs.
The report also showed that international bilateral customers remitted $7.13 million out of $18.69 million invoiced, representing a remittance rate of 38.09 per cent, while domestic bilateral customers paid ₦3.19 billion out of ₦3.64 billion billed, achieving a stronger remittance rate of 87.61 per cent.
In terms of energy efficiency, Discos received 7,348.95GWh in Q3 2025 but billed only 6,158.54GWh to end‑users, translating to an overall energy accounting efficiency of 83.80 per cent, up from 82.43 per cent in Q2 2025.
NERC attributed under‑recovery of billed revenues to customer unwillingness to pay, service dissatisfaction, and inadequate metering infrastructure.
Among the Discos, Ikeja Electric recorded the highest collection efficiency at 100 per cent, followed by Eko (88.74 per cent), Benin (86.44 per cent), and Abuja (81.60 per cent). Conversely, Kaduna Disco posted the lowest collection efficiency at 45.67 per cent.
The commission noted that while several Discos recorded improvements in collection efficiency during the quarter, others, including Kaduna and Ibadan Discos, experienced notable declines.
