DisCos Miss Targets in Q2, Record N129.07bn Revenue Loss—NERC

All the 11 electricity distribution companies (DisCos) missed their 2026 loss reduction targets in the second quarter, recording an estimated revenue loss of N129.07 billion, the Nigerian Electricity Regulatory Commission (NERC) has said.

The figure was contained in NERC’s Second Quarter 2026 report, which tracked the aggregate technical, commercial and collection (ATC&C) losses of the DisCos against the targets set in the Multi-Year Tariff Order (MYTO).

The DisCos collected N603.64 billion of the N744.67 billion billed, a collection efficiency of 81.06 per cent, up 2.11 percentage points from 78.95 per cent in the first quarter. Benin recorded the highest collection efficiency at 92.68 per cent, followed by Ikeja at 92.20 per cent and Eko at 89.39 per cent. Kaduna (52.16 per cent), Jos (55.02 per cent) and Kano (47.74 per cent) were weakest.

NERC explained that a DisCo that beats its allowed ATC&C loss earns more on its tariffs, while one that misses it cannot earn the revenue on which its tariffs were set.

The Commission said excess losses cannot be passed on to customers and warned that they “may compromise the long-term financial positions of the DisCos affected.”

The DisCos’ combined ATC&C loss was 36.23 per cent in the quarter, 19.31 percentage points above the 16.92 per cent target used to set tariffs for 2026. The estimated revenue loss equals 17.60 per cent of the N733.20 billion the DisCos were expected to earn in the period.

The report says the aggregate loss was made up of 21.33 per cent in technical and commercial losses and 18.94 per cent in collection losses.

The result was a slight improvement on the first quarter, when ATC&C loss stood at 37.44 per cent and the revenue loss was N140.64 billion. The gap between actual losses and target narrowed from 20.52 percentage points to 19.31, which cut the revenue loss by about ₦11.57 billion.

Kaduna DisCo recorded the widest gap, with ATC&C losses of 67.70 per cent against a target of 18.18 per cent, a shortfall of 49.52 percentage points. Kano followed with 60.43 per cent against 17.45 per cent, and Jos with 61.30 per cent against 20.80 per cent.

Yola DisCo posted 54.04 per cent against a target of 29.00 per cent. Ibadan recorded 40.03 per cent against 17.50 per cent, and Enugu 36.80 per cent against 18.08 per cent.

Benin recorded 33.84 per cent against 17.23 per cent. Abuja recorded 32.31 per cent against 16.97 per cent, and Port Harcourt 29.60 per cent against 16.67 per cent. Ikeja posted 25.12 per cent against 13.54 per cent.

Eko DisCo came closest to its target, with ATC&C losses of 21.00 per cent against 14.19 per cent, a gap of 6.81 percentage points.

Six DisCos improved on their first quarter performance. Ibadan cut its losses by 8.07 percentage points, Port Harcourt by 6.39, Enugu by 5.91, Benin by 5.87, Yola by 2.32 and Kaduna by 1.96.

The other five recorded higher losses. Kano’s rose by 15.35 percentage points, from 45.08 per cent to 60.43 per cent, the sharpest deterioration in the sector. Jos rose by 3.30 percentage points. Eko, Ikeja and Abuja each rose by less than one percentage point.

The report shows Kano took in more energy in the quarter, with the naira value of energy received rising from N48.02 billion to N57.04 billion. Its collections fell from N26.37 billion to N22.57 billion, and its collection efficiency dropped from 62.76 per cent to 47.74 per cent, the lowest among the 11 DisCos.

The DisCos received energy worth ₦946.57 billion in the quarter but billed customers ₦744.67 billion, a billing efficiency of 78.67 per cent. That left billing losses of ₦201.90 billion, which NERC attributed to commercial losses such as energy theft and poor energy accounting, and to the inability to bill energy at the weighted average allowed tariff.

In volume terms, the DisCos received 6,982.32GWh but billed customers for only 5,812.31GWh.

They collected N603.64 billion of the N744.67 billion billed, a collection efficiency of 81.06 per cent, up 2.11 percentage points from 78.95 per cent in the first quarter. Benin recorded the highest collection efficiency at 92.68 per cent, followed by Ikeja at 92.20 per cent and Eko at 89.39 per cent. Kaduna (52.16 per cent), Jos (55.02 per cent) and Kano (47.74 per cent) were weakest.

NERC explained that a DisCo that beats its allowed ATC&C loss earns more on its tariffs, while one that misses it cannot earn the revenue on which its tariffs were set.

The Commission said excess losses cannot be passed on to customers and warned that they “may compromise the long-term financial positions of the DisCos affected.

NERC said the most proven ways to improve energy accounting and revenue recovery are accurate customer enumeration and the installation of meters. It noted that DisCos can use the Meter Acquisition Fund and the Distribution Sector Recovery Program to close the metering gap.

As of June 30, 7,743,839 of the 12,589,486 active registered customers had meters, a metering rate of 61.51 per cent. DisCos installed 350,270 meters in the quarter, down from 426,985 in the first quarter.