Electricity distribution companies (DisCos) failed to recover N669.49 billion from electricity bills issued to customers in 2025 even as another N89.58 billion market shortfall was recorded in their remittances to the Nigerian Bulk Electricity Trading Company (NBET) and Market Operator (MO), worsening liquidity pressures across the sector.

The Nigerian Electricity Regulatory Commission (NERC), in its latest 2025 Annual Report, said the 11 DisCos issued electricity bills totalling N2.988 trillion to customers in the year but collected N2.318 trillion, translating to a collection efficiency of 77.6 per cent.

“The significant under-recovery of the invoices issued to customers by DisCos is driven by lack of willingness of customers to pay bills when due, customer dissatisfaction with DisCos’ services and inadequate customer metering, among other challenges,” NERC stated.

The N669.49 billion shortfall represents revenue that was not recovered from customers during the year. A total of N2.988 trillion was billed while N2.318 billion was collected.

NERC said the performance meant that for every N100 worth of electricity billed to customers by DisCos in 2025, approximately N22.40 was not recovered.

It warned that the collection and billing inefficiency continued to undermine the financial liquidity of the Nigerian Electricity Supply Industry (NESI), limiting its ability to grow and attract new investments.

“The significant collection inefficiency, combined with billing inefficiency, has continued to adversely impact the financial liquidity of the industry, ultimately limiting the NESI’s ability to grow and attract new investments,” the Commission stated.

The commercial challenges extended to upstream market participants as NERC reported that the NBET and MO issued a gross invoice of N1.72162 trillion to DisCos in 2025 for energy costs and administrative services.

The DisCos remitted, representing an overall remittance performance of 94.8 per cent and leaving a deficit of N89.58 billion.

The Commission described the N89.58 billion deficit as “market shortfall” attributable to market participants.

The report pointed out that the commercial performance of the NESI measures the flow of funds from customers to upstream electricity industry players, noting that financial performance is critical because funds are required by all players along the value chain to sustain their operations.

NERC also noted that prompt payment of upstream invoices is critical to securing the availability of generation and transmission capacities.

The weak revenue recovery came amid broader commercial inefficiencies across the distribution segment, with the DisCos recording an aggregate technical, commercial and collection (ATC&C) loss of 37.03 per cent in 2025.

NERC said the aggregate loss comprised 18.86 per cent technical and commercial losses and 22.40 per cent collection losses, putting the overall performance 16.49 percentage points above the 20.54 per cent efficient loss target used in the 2025 Multi-Year Tariff Order (MYTO).

Only Eko DisCo surpassed its ATC&C target, recording an actual loss of 16.13 per cent against a target of 16.88 per cent. All other DisCos failed to achieve their respective targets, with Kaduna DisCo recording the highest ATC&C loss at 71.88 per cent against a MYTO target of 21.32 per cent.

Jos DisCo followed with 62.15 per cent against a 26.09 per cent target, while Yola recorded 61.19 per cent against a target of 44 per cent.

NERC stated that the excess ATC&C losses incurred by DisCos are not recoverable from customers and could compromise the long-term financial positions of the affected companies.

The commercial weakness was also evident in the amount of electricity the DisCos were able to account for and bill. The report showed that the distributors took 31,251.77GWh of energy at their trading points in 2025 but billed customers for only 25,867.86GWh, representing an energy accounting efficiency of 82.77 per cent.

At the billing stage, N3.683 trillion worth of electricity was supplied by the DisCos, but only N2.988 trillion was billed to end-users, resulting in a gross billing efficiency of 81.14 per cent.

There were significant differences in collection performance among the DisCos as Eko DisCo recorded the highest collection efficiency at 87.9 per cent, closely followed by Ikeja DisCo at 87.89 per cent.

Kaduna DisCo recorded the lowest collection efficiency at 45.68 per cent, collecting N51.38 billion from N112.48 billion billed Jos DisCo recorded 46.11 per cent, collecting N67.77 billion from N146.98 billion billed.

The 2025 figures therefore show persistent commercial weaknesses across the electricity distribution chain, from the inability to bill all energy received to the failure to recover all billed revenue and fully meet upstream market obligations.