Nigeria’s electricity distribution companies (DisCos) might be unable to recover N669.49 billion from electricity bills issued to customers in 2025, raising fresh concerns about the financial health of the power sector.
In its 2025 Annual Report, the Nigerian Electricity Regulatory Commission (NERC) said the DisCos sold electricity worth N3.68 trillion in the year but billed customers N2.99 trillion.
However, out of the amount billed, only N2.32 trillion was collected, leaving N669.49 billion unpaid.
This translated to a collection efficiency of 77.60 per cent, NERC said.
The commission said the DisCos billed electricity consumers N2, 988.30 billion but collected only N2, 318.81 billion, translating to a collection efficiency of 77.60 percent.
The figures suggest that the DisCos collect about N77.60 for every N100 they bill customers, leaving about N22.40 uncollected. At the same time, the number of unpaid bills also increased significantly from the previous year.
NERC said the DisCos failed to collect N536.95 billion in 2024. This increased to N669.49 billion in 2025, which represents an increase of N132.54 billion, or 24.7 per cent in a year.
The regulator’s report found it wasn’t just that customers weren’t paying their bills. The DisCos provided a lot of electricity which wasn’t billed to customers in the first place.
The NERC supplied N3.68 trillion worth of electricity during the year, translating to a gross billing efficiency of 81.14 per cent, the Commission said. This means electricity worth about N694.80 billion was supplied but unbilled.
The combination of poor billing and collection continued to pressure the finances of the Nigerian Electricity Supply Industry (NESI), the commission said.
“The inefficiencies are ‘dampening the financial liquidity’ of the industry and holding back its capacity to support new investments,” it said.
The financial difficulties also impacted the DisCos’ payments to other market players in the electricity market.
According to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator, NERC, N1.72 trillion gross invoices were issued to the DisCos for the cost of energy and administrative services in 2025.
The DisCos paid N1.63 trillion, accounting for 94.80 per cent of their obligations, leaving a shortfall of N89.58 billion.
The regulator said the amount was an underpayment and blamed it on market participants.
The situation underscores one of the big problems facing Nigeria’s power sector: it’s one thing to generate and distribute electricity, but another to collect the money owed for the power supplied.
When DisCos cannot generate sufficient revenue, they have less money to pay their financial obligations and invest in infrastructure.
This can impact their ability to maintain distribution networks, replace faulty equipment, expand their networks, and upgrade the supply of electricity to consumers.
The latest figures also come against a backdrop of continuing problems with metering and accurate billing. A large number of electricity customers are still unmetered, and disputes over estimated bills and complaints about inaccurate billing have been frequent.
NERC has been calling for measures to improve metering, billing and revenue collection, and strengthen consumer protection.
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The commission has also taken regulatory action against DisCos for poor performance and non-compliance with its rules. In a recent case, NERC took over the regulation of Kaduna Electricity Distribution Company after it discovered serious financial and operational weaknesses.
The Nigerian electricity regulator said Kaduna Disko had a collection efficiency of 46.69 per cent in 2025 and its billing efficiency was 61.56 per cent.
The problem remains acute throughout the wider sector and the annual figures for the latest year show the ongoing reforms have yet to address it.
The Electricity Act 2023 had brought reforms for increased competition, investment and access to electricity including allowing more participation from states and private investors in the electricity market.
But NERC’s latest figures suggest improving DisCos’ financial performance remains critical to achieving the broader goals of the reforms.
For the consumer the revenue problem is directly related to the quality of electricity services they are receiving. If DisCos are unable to recover sufficient funds from the electricity they supply, it restricts their capacity to invest in improved infrastructure and offer a more consistent service.
So the N669.49 billion that will remain uncollected in 2025 is more than just unpaid bills. That is money that could have been used to strengthen the electricity distribution system and to support investment throughout the sector.
NERC’s figures indicate that without closing billing gaps, better metering and getting more customers to pay for the electricity they use, it will be hard to solve the financial problems facing Nigeria’s power sector.
