Nigeria’s Widening Metering Gap and Rising Estimated Billing Customers

Nigeria is facing significant challenges in its effort to eliminate estimated billing by the end of 2024. The recent increase in the number of customers on estimated billing across the country’s electricity distribution companies (DisCos) highlights these hurdles. According to the Nigeria Electricity Report by the National Bureau of Statistics (NBS) for the first quarter of 2024, there has been a 10% quarter-on-quarter increase in estimated billing customers, widening the metering gap.

Key Findings

• Increase in Estimated Billing Customers:
  • The number of customers on estimated billing rose from 5.83 million in Q4 2023 to 6.43 million in Q1 2024, marking a 10% increase.
  • Year-on-year, the number of estimated billing customers increased by 8%, from 5.96 million in Q1 2023.
• Challenges and Government Subsidies:
  • The government continues to subsidize customers not on Band A, while Band A customers on estimated billing still pay based on estimation.
  • This increase highlights the persistent inability to adequately meter all customers, leading to a reliance on estimated billing.
• DisCo-Specific Data:
  • Ibadan Electricity Distribution Company (IBEDC): Recorded the highest number of estimated billing customers at 1.41 million in Q1 2024, up from 1.37 million in the previous quarter.
  • Enugu Electricity Distribution Company (EEDC): Saw a significant increase to 765,662 customers from 709,104 in Q4 2023.

Customer and DisCo Disputes

The reliance on estimated billing often leads to disputes between consumers and DisCos. Many consumers feel that the estimates are inflated and do not reflect their actual consumption, prompting calls for more accurate metering.

Regulatory Actions

The Nigeria Electricity Regulatory Commission (NERC) fined 11 electricity distribution companies a total of 5 billion Naira for non-compliance with mandatory capping of estimated billing for unmetered customers.

Metering Progress and Challenges

• Metered Customer Growth:
  • The report shows a modest 5% quarter-on-quarter increase in metered customers, from 5.61 million in Q4 2023 to 5.91 million in Q1 2024.
  • Year-on-year, metered customers increased by 11%, from 5.31 million in Q1 2023.
• DisCo Challenges:
  • DisCos face financial constraints, logistical issues, and regulatory hurdles in closing the metering gap.
  • Abuja Electricity Distribution Company (AEDC): Increased its metered customers to 892,028 in Q1 2024.
  • Benin Electricity Distribution Company (BEDC): Raised its metered customers to 672,179 in Q1 2024.

Total Customer Base

The total number of customers served by DisCos in Nigeria has shown consistent growth:

• In Q1 2024, the total customer base grew to 12.33 million from 12.12 million in Q4 2023, a quarter-on-quarter rise of 2%.
• Year-on-year, this represents a 9% increase from 11.27 million in Q1 2023.

Notable DisCo Data:

• Ibadan Electricity Distribution Company (IBEDC): Highest total number of customers at 2.48 million in Q1 2024.
• Enugu Electricity Distribution Company (EEDC): Substantial customer base with 1.39 million in Q1 2024.
• Abuja Electricity Distribution Company (AEDC): 1.46 million customers, reflecting a significant presence in the capital region.

Presidential Campaign and Policy Implementation

President Bola Tinubu’s campaign manifesto outlined plans to eliminate estimated billing and ensure all Nigerian homes and businesses are equipped with prepaid meters. Despite these intentions, the number of estimated billing customers has seen the largest growth rate both quarterly and yearly under his administration, based on data up to 2022.

Financial and Operational Impact

The rise in estimated billing has led to collection losses for DisCos. Revenue collected by DisCos dropped by approximately 1.13%, from N294.95 billion in Q4 2023 to N291.62 billion in Q1 2024. This decline underscores the financial strain on DisCos and the urgent need for comprehensive metering solutions.

Conclusion

Addressing the metering gap requires concerted efforts from all stakeholders, including government support, investment in metering infrastructure, and improved regulatory frameworks. While there has been progress in increasing the number of metered customers, the rate of growth is insufficient to counterbalance the rapid rise in estimated billing customers. Comprehensive metering is essential for efficient billing, revenue collection, and overall customer satisfaction in Nigeria’s electricity sector.