NERC raked in a cool N5.63 billion in Q2 2023

Infostride News has reported that the Nigerian Electricity Regulatory Commission (NERC) recently disclosed its financial performance for the second quarter of 2023. According to the Q2/2023 Electricity on Demand report released by NERC, the commission generated ₦5.63 billion in revenue during this period, with total expenditure amounting to ₦2.46 billion.

This financial statement indicates a noteworthy increase in revenue, reflecting a 19.12% growth compared to the previous quarter (2023/Q1), where revenue stood at ₦4.73 billion. However, it is important to note that NERC’s total expenditure also increased by 36.80%, rising from ₦1.80 billion in Q1 to ₦2.46 billion in Q2 of 2023.

What’s particularly significant is that NERC maintained a positive net cash flow of ₦3.17 billion during the quarter, marking the 16th consecutive quarter of positive cash flow. This remarkable financial stability demonstrates the commission’s strong financial performance and its ability to effectively manage its resources.

In addition to the financial aspects, the NERC report also shed light on the energy offtake by Distribution Companies (DisCos) at their trading points. The average energy offtake for 2023/Q2 was 3,251.31 MWh/h, which is a decrease of -218.82 MWh/h (-6.31%) compared to the energy offtake in 2023/Q1, which was 3,470.13 MWh/h.

During the same period, all DisCos consumed less energy than their available Peak Control Capacity (PCC), except for Eko Distribution Company (DisCo), which surpassed its PCC with an offtake performance of 116.90%. This suggests that there is room for improved energy utilization by most DisCos.

A quarter-on-quarter analysis revealed an overall improvement in the energy offtake performance of DisCos in 2023/Q2, with a 3.18 percentage point (pp) increase (96.60%) compared to the performance recorded in 2023/Q1, which was 93.42%. This growth is particularly notable for Eko DisCo, which significantly improved its offtake performance by 23.44 pp between the two quarters. However, Jos and Kano DisCos recorded decreases of -3.60pp and -0.54pp, respectively.

During 2023/Q2, the total energy offtake by all DisCos amounted to 7,100.87GWh, while the total energy billed was 5,789.21GWh, resulting in a billing efficiency of 81.53%. This means that ₦18.47 out of every ₦100 worth of energy received by DisCos in 2023/Q2 was not billed to end users. This indicates room for improvement in billing processes and revenue collection.

Comparatively, in 2023/Q1, the billing efficiency was 77.97%, demonstrating a 3.56 pp improvement in billing efficiency at the aggregate level between the two quarters. This improvement signifies that DisCos are making strides in optimizing their billing processes.

Ikeja DisCo stood out with a billing efficiency of 92.17%, the highest among all DisCos during this quarter. On the other hand, Kaduna DisCo reported the lowest billing efficiency at 64.16%. Despite the variations in billing efficiencies, it’s worth noting that all DisCos, except Benin, demonstrated improvements in their billing efficiencies in 2023/Q2 compared to 2023/Q1.

Yola, Kaduna, and Ikeja DisCos exhibited the most significant improvements in billing efficiency, with increases of 11.09 pp, 9.74 pp, and 6.66 pp, respectively. These improvements are indicative of the efforts made by DisCos to enhance their billing and revenue collection processes.

In conclusion, NERC’s financial performance for the second quarter of 2023, as reported by Infostride News, paints a positive picture of the commission’s financial stability and management. The increase in revenue and consistent positive cash flow demonstrate NERC’s ability to navigate the financial challenges of the electricity sector effectively.

Moreover, the report highlights the energy offtake performance of DisCos, with some notable improvements in billing efficiency. However, it also points out the room for further enhancements in energy utilization and billing processes, particularly in areas where billing efficiency is lower. These insights are crucial for the ongoing efforts to improve the electricity distribution sector in Nigeria.