By Chibuzor Alli
Nigeria’s electricity distribution companies failed to bill or collect about N1.36tn in electricity revenue in 2025, highlighting the financial challenges facing the country’s power sector, the Nigerian Electricity Regulatory Commission (NERC) says.
The 11 distribution companies (DisCos) supplied electricity worth N3.68tn during the year but billed consumers for only N2.99tn, leaving about N694.8bn worth of electricity unbilled, according to NERC’s 2025 Annual Report.
Of the amount billed, the DisCos collected only N2.32tn, leaving N669.49bn outstanding.
The combined billing and collection gap therefore stood at about N1.36tn.
NERC stated, “The total billing to electricity consumers by the DisCos was N2.99tn, but only N2.32tn was collected, translating to a collection efficiency of 77.60 per cent.”
The figures mean the DisCos achieved a gross billing efficiency of 81.14% and a collection efficiency of 77.60% during the year.
The regulator also said the DisCos received 31,251.77 gigawatt-hours (GWh) of electricity at their trading points but billed customers for only 25,867.86GWh, representing an energy accounting efficiency of 82.77%.
Ibadan DisCo recorded the highest energy accounting efficiency at 88.84%, while Enugu recorded the lowest at 72.18%.
Power sector losses remain high
The revenue gap comes as the sector continues to struggle with technical, commercial and collection losses.
NERC said the weighted average aggregate technical, commercial and collection loss across the DisCos stood at 37.03% in 2025.
The figure comprised 18.86% technical and commercial losses and 22.40% collection losses. It was 16.49 percentage points above the 20.54% target set under the 2025 Multi-Year Tariff Order.
The scale of the losses has drawn criticism from former senator and businessman Ben Murray-Bruce, who said Nigeria’s electricity privatisation had failed to deliver the investment and reliability promised to consumers.
In an open letter to President Bola Tinubu, Mr Murray-Bruce said Nigeria needed to stop pretending that the existing electricity model was working.
“The 2013 privatisation was not a reform. It was a transfer of custody.”
He argued that investors acquired electricity assets without having the financial capacity needed to rebuild and expand them.
“The men and women who bought the GenCos and the DisCos had enough money to purchase the assets. They did not have enough money to run them. Owning a power station and capitalising a power station are two different economic acts, and we confused them,” he said.
Metering gap
Mr Murray-Bruce also criticised the financial position of the DisCos and their responsibility for collecting electricity revenue from consumers.
He said the continued failure to meter millions of customers had allowed estimated billing to persist.
“A meter is a machine that tells the truth. An estimated bill is a machine that does not. An industry that cannot generate power has discovered it can still generate revenue by billing darkness,” Murray-Bruce stated.
NERC said there were 12.16 million active registered electricity customers as of December 2025.
Of these, 6.97 million, or 57.27%, were metered, leaving 5.20 million customers, representing a metering gap of 42.73%.
The DisCos installed 972,040 meters during 2025, with Ibadan recording the highest number at 180,256 and Yola the lowest at 14,231.
DisCos owe N89.58bn
The financial challenges extend beyond revenue collected from consumers.
NERC said the Nigerian Bulk Electricity Trading Company and the market operator issued gross invoices of N1.72tn to the DisCos in 2025 for energy costs and administrative services.
The DisCos remitted N1.632tn, leaving a market shortfall of N89.58bn.
Mr Murray-Bruce acknowledged that generation companies also had legitimate grievances over unpaid obligations but said all participants in the electricity market needed to accept responsibility for its failures.
“To the GenCos: you are owed. That is true, and I will not pretend otherwise. But you contracted into a market you knew was insolvent, and you have spent a decade lobbying for tariffs and bailouts rather than capital. You cannot be a private company on the day the tariff rises and a public charity on the day the invoice falls due,” he wrote.
N1.93tn subsidy obligation
The Federal Government also continued to support the electricity market through tariff subsidies.
NERC said the government incurred a subsidy obligation of N1.93tn in 2025, equivalent to 57.44% of the total N3.357tn NBET invoice for the year.
The regulator said the subsidy was “largely attributable to the FGN’s policy to freeze allowed tariffs paid by customers despite the increase in cost-reflective tariffs.”
Mr Murray-Bruce questioned the effectiveness of the government’s spending on the sector, saying it had failed to deliver reliable electricity.
“Roughly N10tn of public money has gone into this sector in 13 years, and the lights are still off,” he said.
He called for a restructuring of the electricity market, arguing against continued reliance on a centrally driven model.
“Every village, every estate, every community in Nigeria should have its own PHCN,” Murray-Bruce proposed.
Under his proposal, communities and estates would develop their own metered solar generation, while state governments would provide guarantees for financing and residents would pay regulated tariffs.
He also suggested that state governments should take responsibility for powering streetlights, police stations, primary healthcare centres and schools, while the Federal Government focuses on federal institutions and infrastructure.
Two grid collapses recorded
NERC recorded two grid collapse incidents in 2025: one full collapse and one partial collapse.
The full collapse occurred on 10 September 2025, while the partial collapse on 29 December was linked to the failure of one circuit breaker on the Benin-Onitsha 330kV line at the Benin transmission station.
Mr Murray-Bruce also urged Nigerians to hold state governments accountable for electricity responsibilities devolved under the new legal framework.
“Stop blaming the president for the darkness in your street. Since 2023, electricity has been a concurrent responsibility,” he wrote.
The NERC figures point to broader financial problems across Nigeria’s electricity value chain, with poor billing, weak collections, technical and commercial losses, incomplete metering, market under-remittances and a large government subsidy burden continuing to undermine the sector.
With more than four in every 10 active customers unmetered at the end of 2025 and the DisCos failing to bill nearly one-fifth of electricity supplied to them, the sector continues to face significant challenges in converting electricity delivered to consumers into revenue.
Leave a comment