Nigeria’s electricity distribution segment recorded a notable financial boost in the third quarter of 2025 as revenues climbed to ₦570.21 billion, reflecting improving operational performance across the sector.
The Nigerian Electricity Regulatory Commission, NERC, disclosed this in its latest quarterly report, attributing the rise to gradual enhancements in billing and tariff collection by Electricity Distribution Companies, popularly called DisCos.
According to the regulator, collection efficiency improved significantly to 80.7 per cent between July and September 2025, an increase of 4.63 percentage points compared to the previous quarter.
The development indicates better revenue recovery, even though current tariffs remain below cost-reflective levels.
Despite the introduction of the premium Band ‘A’ tariff category, NERC noted that Federal Government subsidies continued to play a central role in keeping the electricity value chain afloat.
Within the quarter, the government paid ₦458.75 billion as electricity subsidies.
The commission explained that non–cost-reflective tariffs, particularly the freezing of certain end-user tariffs at July 2024 rates, have sustained the subsidy burden.
Rising generation costs without corresponding tariff adjustments created funding gaps that the government had to cover.
Out of the ₦706.61 billion billed to customers in the quarter, utility companies were able to collect ₦570.21 billion, while cumulative billing losses by DisCos reached ₦147.92 billion.
NERC further revealed that the total naira value of energy offtake by all DisCos stood at ₦854.53 billion, while billing efficiency rose marginally to 82.69 per cent from 81.61 per cent in the second quarter.
The report showed a positive trend in energy accounting efficiency, which improved to 83.80 per cent as 6,158.54 gigawatt-hours of electricity were billed out of 7,348.95GWh received by DisCos nationwide.
Commenting on the administration of subsidies, NERC stated that in the absence of cost-reflective tariffs, government intervention was applied to generation costs payable by DisCos to the Nigerian Bulk Electricity Trading Company through the DisCos’ Remittance Obligation structure.
However, the regulator pointed out persistent challenges undermining full revenue recovery.
These include inadequate metering, customer dissatisfaction with service delivery, and unwillingness to pay for consumed electricity.
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On bilateral transactions, international customers remitted only $7.125 million out of $18.69 million invoiced, representing a 38.09 per cent remittance rate.
Domestic bilateral customers performed better, paying ₦3.19 billion out of ₦3.64 billion billed.
In terms of individual DisCo performance, Ikeja Electric topped the chart with 100 per cent collection efficiency, followed by Eko Disco with 88.74 per cent and Benin Disco with 86.44 per cent. Kaduna Disco posted the weakest result at 45.67 per cent.
NERC emphasised that prompt settlement of upstream obligations remains essential to sustaining electricity generation and transmission capacity in the country.
The regulator expressed optimism that continued improvements in collections would gradually reduce government dependence on subsidies and place the Nigerian electricity market on a more stable footing.