The Aggregate Technical, Commercial and Collection loss is a
summation of billing losses incurred by the Disco due to its inability to bill
100 per cent of delivered energy to consumers (technical and commercial losses)
and the collection losses arising from the
Disco’s inability to collect against the invoice issues out
to consumers.
Data sourced by The PUNCH from an industry report, ‘Key
Operational & Financial Data of NESI’ for 2019 to 2022, showed that last
year, while the Disco recorded an ATC&C loss of 70 per cent, it also fell
off its Multi Year Tariff Order collection target by 64 per cent.
A breakdown of what led to the loss, according to the
report, was that the Disco out of the 633 gigawatts per hour received in the
year under review, the utility firm was able to bill just 358GWh to customers.
Again, the Disco billed about N19bn worth of electricity to
its customers, however, was able to collect N10bn in form of tariffs.
Out of the market invoice of N21bn issued, Yola Disco
remitted just N4bn, failing to remit N17bn to the Nigerian Bulk Electricity
Trade company.
The report puts the utility firm’s billing efficiency at 56
per cent, collection efficiency at 52 per cent, and its remittance performance
at 20 per cent.
Of the 480,584 registered customers under the Disco, 87,855
or 18 per cent have so far been metered, leaving a metering gap of 392,729 or
82 per cent.
ATC&C is a critical performance-setting parameter for
tariff determination because it represents the efficient losses, which the
Discos are allowed to recover from customers. The MYTO makes allowance for
specific ATC&C loss level targets for each Disco, which usually reduces
over the course of time as investments are made with a view of reducing the
efficiency losses.
The Nigerian Electricity Regulatory Commission, in its
latest report in the second quarter of 2022, puts overall ATC&C losses for
the 11 Discos at 45 per cent consisting of 22 per cent technical and commercial
losses and 29 per cent in collection loss.
This level of ATC&C losses implies that over the course
of 2022/Q2 on average, as much as N4.46 in every N10.00 worth of energy,
received by a Disco was unrecovered due to a combination of inefficient
distribution networks, energy theft, low revenue collection and the unwillingness
of customers to pay their bills.
By way of comparison, the ATC&C losses for 2022/Q2
decreased by -3.28 per cent from the 48 per cent recorded in 2022/Q1. This
decrease was largely driven by Benin (50 per cent), Enugu (48 per cent), Abuja
(40 per cent), Jos (64 per cent) and Eko (24 per cent) Discos which had
decreased ATC&C losses of -6.53, -6.32, -4.57, -4.20 and -3.39 per cent
respectively between 2022/Q1 and 2022/Q2.
The inability of most Discos to meet their allowed loss
targets means they were unable to meet revenue requirements, thereby,
compromising their long-term financial position.
NERC said the overall ATC&C losses of 45 per cent were
significantly higher than the expected ATC&C losses (21 per cent) provided
for in the MYTO for the quarter.
All Discos recorded ATC&C losses that were above their
allowed targets. Kaduna, Kano, Enugu, Jos and Ibadan had the widest negative
variances of 63.43, 38.12, 36.56, 36.45 and 33.87 per cent respectively
relative to their allowed MYTO targets.
NERC said there was an urgent need for all the Discos to
take emergency remedial actions through customer enumeration and increased
revenue assurance to improve their ATC&C losses. It claimed that failure to
resolve this would not only prevent the Discos from being able to meet their
upstream obligations, but it would also saddle them with too much debt and
erode their equity.
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