Nigeria’s electricity distribution companies (DisCos) may be unable to collect 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 imply that the DisCos collected about N77.60 for every N100 they bill customers, leaving about N22.40 uncollected. The number of unpaid bills also grew significantly from the previous year.
NERC said the DisCos failed to collect N536.95 billion in 2024. This rose to N669.49 billion in 2025, indicating an increase of N132.54 billion, or 24.7 per cent, in one year.
The regulator’s report found that the problem wasn’t simply 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 N3.68 trillion worth of electricity supplied during the year by the NERC translated 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.
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“The inefficiencies are ‘weakening the financial liquidity’ of the industry and restricting its ability to support new investments,” it said.
The financial difficulties also affected the DisCos’ payments to other market participants in the electricity market.
The Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator, NERC stated, gave out N1.72 trillion gross invoices to the DisCos in 2025 for the cost of energy and administrative services.
The DisCos paid N1.63 trillion, representing 94.80 per cent of their obligations, with a shortfall of N89.58 billion.
The regulator called the amount an underpayment and attributed it to market participants.
The situation highlights one of the big problems facing Nigeria’s power sector: it’s one thing to generate and distribute electricity, it’s another to collect the money owed for the power supplied.
When DisCos are unable to collect enough revenue, they have fewer funds to meet 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, as well as strengthening consumer protection.
The commission has also taken regulatory action against DisCos for poor performance and non-compliance with its rules. In one recent case, NERC took over the regulation of the 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 is still acute across the wider sector and the annual figures for the latest year show the continuing reforms have yet to address it.
The Electricity Act 2023 introduced 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 consumers the revenue problem is directly related to the quality of electricity services that they are receiving. If DisCos are unable to recoup enough money from the electricity they supply, it limits their ability to invest in better infrastructure and provide more reliable service.
The N669.49 billion that remained uncollected in 2025 is, therefore, 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 show that without reducing billing gaps, improving metering and ensuring more customers pay for the electricity they consume, it will be difficult to address the financial issues plaguing Nigeria’s power sector.