By Seun Ibiyemi
Nigeria’s power sector suffered revenue leakages of about N1.36 trillion in 2025, as electricity distribution companies (DisCos) failed to bill consumers for power worth N694.8 billion and could not collect another N669.5 billion from electricity already billed, according to the Nigerian Electricity Regulatory Commission (NERC).
The disclosure was contained in NERC’s 2025 Annual Report, which highlighted persistent billing, collection and liquidity challenges across the Nigerian Electricity Supply Industry.
According to the report, the 11 DisCos supplied electricity valued at N3.68 trillion during the year but billed consumers for only N2.99 trillion, representing a gross billing efficiency of 81.14 per cent.
The difference means electricity worth approximately N694.8 billion supplied to consumers was not billed by the distribution companies.
NERC further reported that of the N2.99 trillion billed, only N2.32 trillion was collected, leaving N669.49 billion outstanding.
“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 commission stated.
The combined billing and collection gaps resulted in an estimated N1.36 trillion in revenue that the sector failed to realise during the year.
NERC also disclosed that DisCos received 31,251.77 gigawatt-hours (GWh) of electricity at their trading points but billed consumers for only 25,867.86GWh, translating to an energy accounting efficiency of 82.77 per cent.
Ibadan Electricity Distribution Company recorded the highest energy accounting efficiency at 88.84 per cent, while Enugu recorded the lowest at 72.18 per cent.
The revenue challenges came amid high technical, commercial and collection losses across the distribution segment.
NERC said the weighted average aggregate technical, commercial and collection loss across the 11 DisCos stood at 37.03 per cent in 2025, which was 16.49 percentage points above the 20.54 per cent target under the 2025 Multi-Year Tariff Order.
The figure comprised 18.86 per cent technical and commercial losses and 22.40 per cent collection losses.
The report also showed that Nigeria’s electricity market continued to face a significant metering deficit.
As of December 2025, the country had 12.16 million active registered electricity customers, of which 6.97 million, representing 57.27 per cent, were metered.
This left approximately 5.20 million customers, or 42.73 per cent, without meters.
The DisCos installed 972,040 meters during the year, with Ibadan DisCo recording the highest deployment at 180,256 and Yola the lowest at 14,231.
The persistent commercial losses have drawn criticism from former senator and businessman, Ben Murray-Bruce, who argued that Nigeria’s electricity privatisation had failed to deliver the investment and reliability promised to consumers.
In an open letter to President Bola Tinubu, Murray-Bruce described the 2013 privatisation as a transfer of electricity assets rather than a comprehensive reform.
“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,” he said.
He also criticised the continued reliance on estimated billing, arguing that the absence of meters had contributed to disputes and weakened accountability in the sector.
“A meter is a machine that tells the truth. An estimated bill is a machine that does not,” Murray-Bruce stated.
Beyond the distribution companies, NERC reported that the Nigerian Bulk Electricity Trading Company (NBET) and the Market Operator issued gross invoices of N1.72 trillion to the DisCos in 2025 for energy costs and administrative services.
The DisCos remitted N1.632 trillion, leaving a market shortfall of N89.58 billion.
The Federal Government also continued to provide substantial financial support to the electricity market through tariff subsidies.
NERC said the government incurred a subsidy obligation of N1.93 trillion in 2025, equivalent to 57.44 per cent of the total N3.357 trillion NBET invoice for the year.
The commission attributed the subsidy largely to the government’s policy of keeping allowed tariffs below cost-reflective levels despite increases in the cost of electricity supply.
NERC 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.”
Murray-Bruce, however, argued that the huge public expenditure on the sector had not translated into reliable electricity supply.
He estimated that about N10 trillion in public funds had gone into the sector over 13 years while electricity supply remained unreliable.
The former senator called for a more decentralised electricity market, proposing that communities and estates should be allowed to develop their own metered solar generation systems, with state governments providing financing guarantees and residents paying regulated tariffs.
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He also urged state governments to take greater responsibility for electricity infrastructure within their jurisdictions, including streetlights, police stations, primary healthcare centres and schools.
The NERC report further recorded two grid collapse incidents in 2025, comprising one full collapse and one partial collapse.
The full system collapse occurred on September 10, while the partial collapse on December 29 was linked to the failure of one circuit breaker on the Benin-Onitsha 330kV transmission line at the Benin transmission station.
The figures highlight the scale of the financial challenges facing Nigeria’s electricity sector, where weak billing and collections, high technical and commercial losses, inadequate metering, market under-remittances and substantial tariff subsidy obligations continue to undermine the financial sustainability of the power market.
For consumers, the challenges remain significant, with more than four in every 10 active electricity customers unmetered at the end of 2025, while DisCos failed to bill electricity worth nearly N695 billion supplied to consumers.
