The Managing Director/ Chief Executive Officer, Association of Nigerian Electricity Distributors, Barrister Sunday Oduntan, has raised the alarm that electricity distribution companies in Nigeria have been enmeshed in high Aggregate Technical, Commercial and Collection (ATC&C) losses and liquidity tightness.
He blamed the liquidity challenge on collection, adding that the electricity distributors do not collect up to 50 per cent or 60 per cent of the electricity bills.
In an interview with New Telegraph over the weekend, he also said that DisCos did not have access to funds, adding that these problems had made it difficult for them to invest in technology.
He said he would not suggest a return to the subsidy regime but pleaded that the government should cause the Central Bank of Nigeria to impress it upon or enable financial institutions to make funds availbale at single digit interest rate to DisCos to upgrade their services.
Oduntan said: “We have a liquidity crisis. We don’t have funds because as we get electricity, we are distributors, as we get electricity from the producers and we sell it to end users, we are not able to collect even up to 50 per cent, 60 per cent of the energy.
“There’s nothing I can say about whether there should be a pool of funds from the government for us to access because if you talk of the government, are we going back to subsidy era? “Can the government even afford it?
What the government can do is to create a better and an enabling environment whereby CBN, financial institutions can be asked to lend money at a single digit rate. That will help.
It will not cripple the system.” Aggregate Technical, Commercial, and Collection (ATC&C) losses represent the total percentage of energy losses and uncollected revenue experienced by electricity distribution companies (DisCos).
High ATC&C losses can significantly impact a DisCo’s financial health and operational efficiency. According to data from the Nigerian Electricity Regulatory Commission’s (NERC) and individual DisCos, in 2024, many of the Discos had high ATC&C losses.
Kaduna Electric’s ATC&C losses were reported as follows: Second Quarter (Q2) 2024. It recorded an ATC&C loss of 68.76 per cent, which is 23.76 percentage points higher than its Multi-Year Tariff Order (MYTO) target of 45.00 per cent.
In third quarter (Q3) 2024: The ATC&C loss increased to 70.84 per cent, exceeding the MYTO target by 25.84 percentage points.
These figures indicate a trend of increasing ATC&C losses for Kaduna Electric throughout 2024, moving further away from regulatory targets as the year progressed.
Kano Electricity Distribution Company (KEDCO) reported an ATC&C loss of 53.07 per cent, which is 37.22 percentage points higher than its Multi-Year Tariff Order (MYTO) target of 15.85 per cent.
This figure indicates that KEDCO’s ATC&C losses were significantly above the regulatory targets during the available reporting periods in 2024.
Abuja Electricity Distribution Company (AEDC) reported the following ATC&C losses. Second Quarter (Q2) 2024: AEDC record d an ATC&C loss of 36.30 per cent, which is 11.30 percentage points higher than its Multi-Year Tariff Order (MYTO) target of 25.00 per cent. Third Quarter (Q3) 2024: The ATC&C loss slightly improved to 36.13 per cent, exceeding the MYTO target by 11.13 percentage points.
These figures indicate that while AEDC’s ATC&C losses remained above the regulatory targets in both quarters, there was a marginal improvement of 0.17 percentage points from Q2 to Q3.
Eko Electricity Distribution Company (EKEDC) reported the following ATC&C losses: Second Quarter (Q2) 2024: EKEDC recorded an ATC&C loss of 22.00 per cent, exceeding its Multi-Year Tariff Order (MYTO) target of 15.85 per cent by 6.15 percentage points.
Third Quarter (Q3) 2024: The ATC&C loss increased to 25.67 per cent, surpassing the MYTO target by 9.82 percentage points.
These figures indicate a rising trend in ATC&C losses for EKEDC during 2024, moving further away from regulatory targets as the year progressed. Ikeja Electric’s ATC&C) losses varied across the quarters as follows: First Quarter (Q1) 2024: It achieved an ATC&C loss of 15.81 per cent, outperforming its Multi-Year Tariff Order (MYTO) target of 18.73 per cent. Second Quarter (Q2) 2024: The ATC&C loss increased to 21.93 per cent, exceeding the MYTO target by 3.20 percentage points.
Third Quarter (Q3) 2024: The loss further rose to 27.03 per cent, surpassing the MYTO target by 8.30 percentage points. These figures indicate a trend of increasing ATC&C losses throughout 2024, moving from outperforming regulatory targets in Q1 to exceeding them in subsequent quarters.
Also according to NERC’s fourth quarter 2023 report, Ikeja Electric Plc recorded an ATC&C loss of 42.11 per cent during that period.
This indicates that approximately ₦42.11 out of every ₦100 worth of energy received by Ikeja Electric was unrecovered due to a combination of distribution network losses, energy theft, low revenue collection, and customers’ unwill ingness to pay their bills.
This level of ATC&C loss is 22.05 percentage points higher than the allowed efficient loss target of 20.06 per cent applied in the computation of tariffs in the Multi-Year Tariff Order (MYTO).
Such a discrepancy suggests that Ikeja Electric faced challenges in meeting regulatory efficiency standards during that quarter.
Oduntan, identified some measures that should be adopted to tackle ATC&C losses so as to improve on the operations of distributions companies in Nigeria. He also advised electricity users to pay up their bills.
