NERC’s latest figures expose deep billing, collection and metering weaknesses, while Ben Murray-Bruce urges President Bola Tinubu to rethink the country’s electricity model

Nigeria’s electricity distribution companies left about N1.36 trillion on the table in 2025 through a combination of unbilled electricity and unpaid customer bills, according to the Nigerian Electricity Regulatory Commission’s latest annual report.

Also read: Electricity subsidy falls to N358bn as power demand drops

The figures offer a sobering picture of an industry that supplied electricity worth about N3.68 trillion during the year but billed consumers for only N2.99 trillion.

Of the amount billed, the 11 distribution companies, DisCos, collected about N2.32 trillion, leaving another N669.49 billion outstanding.

The result is a two-sided revenue problem. Electricity worth approximately N694.8 billion was supplied but never billed, while another N669.5 billion was billed but not collected. Together, the gaps amounted to roughly N1.36 trillion. (Punch Newspapers)

NERC recorded an overall billing efficiency of 81.14 per cent and a collection efficiency of 77.60 per cent for the year.

“The total billing to electricity consumers by the DisCos was N2.99tn, but only N2.32tn was collected, translating to a collection efficiency of 77.60 per cent,” the regulator said.

Behind those figures is a more revealing measure of how much electricity disappears between the point where it enters the distribution network and the point where it becomes revenue.

The DisCos received 31,251.77 gigawatt-hours of electricity at their trading points but billed customers for 25,867.86GWh. That translated into an energy accounting efficiency of 82.77 per cent.

Ibadan Electricity Distribution Company recorded the strongest energy accounting efficiency at 88.84 per cent, while Enugu Electricity Distribution Company recorded the lowest at 72.18 per cent.

The weaknesses were not confined to billing.

NERC put the weighted average aggregate technical, commercial and collection loss across the DisCos at 37.03 per cent in 2025, significantly above the 20.54 per cent target set under the 2025 Multi-Year Tariff Order.

The gap was 16.49 percentage points, underlining the distance between the performance expected of the distribution network and what consumers actually experienced.

For former senator and businessman Ben Murray-Bruce, the numbers point to a deeper failure in the structure of Nigeria’s electricity market.

In an open letter to President Bola Ahmed Tinubu, Murray-Bruce argued that the country should stop treating the current model as if it had delivered the transformation promised when the electricity sector was privatised in 2013.

“The 2013 privatisation was not a reform. It was a transfer of custody,” Murray-Bruce wrote. (Business Times)

He argued that the investors who acquired the generating and distribution companies had sufficient resources to buy the assets but lacked the financial capacity required to rebuild and expand them.

“Owning a power station and capitalising a power station are two different economic acts, and we confused them,” he said. (Business Times)

The criticism comes at a difficult moment for an industry still struggling with the basic economics of supplying electricity.

NERC’s figures show that the Federal Government itself remained heavily involved in keeping the market functioning.

In 2025, the government incurred a tariff subsidy obligation of N1.93 trillion, equivalent to 57.44 per cent of the N3.357 trillion total invoice issued by the Nigerian Bulk Electricity Trading Company to the market. (Punch Newspapers)

NERC attributed much of the subsidy obligation to the government’s policy of keeping allowed tariffs below cost-reflective levels despite rising costs.

At the same time, the market recorded a further shortfall between what DisCos were expected to remit and what they actually paid.

NBET and the market operator issued gross invoices of N1.72 trillion to the DisCos for energy costs and administrative services in 2025. The DisCos remitted N1.632 trillion, leaving a market shortfall of N89.58 billion. (Punch Newspapers)

The numbers reveal why liquidity remains one of the sector’s most persistent problems.

Generation companies need to be paid to produce electricity. Transmission infrastructure needs investment and maintenance. DisCos need money to operate and upgrade their networks.

Yet the distribution end of the chain continues to lose substantial revenue through technical and commercial losses, weak billing and incomplete collections.

Consumers, meanwhile, remain caught between unreliable supply and a billing system that is still not fully based on actual consumption.

NERC reported 12.16 million active registered electricity customers at the end of 2025. Of these, 6.97 million, or 57.27 per cent, were metered, leaving about 5.20 million customers, or 42.73 per cent, still without meters.

There was nevertheless some progress.

DisCos installed 972,040 meters during 2025, with Ibadan recording the largest deployment at 180,256 meters and Yola the smallest at 14,231.

Separate data from the National Bureau of Statistics also showed that the number of metered customers reached 6.97 million in the fourth quarter, up 12.18 per cent from 6.21 million a year earlier.

The number of estimated customers fell to 5.20 million from 7.09 million over the same period. (Punch Newspapers)

That improvement is encouraging, but it leaves more than four in every 10 registered customers outside the metered system.

Murray-Bruce believes that problem has become central to the crisis of confidence between consumers and distribution companies.

“A meter is a machine that tells the truth. An estimated bill is a machine that does not,” he wrote. (Business Times)

His criticism reflects a broader frustration with a system in which consumers can face rising electricity costs without necessarily receiving a corresponding improvement in supply.

But the distribution companies are not the only actors facing pressure.

Murray-Bruce acknowledged that generating companies have legitimate claims over unpaid invoices, while arguing that every participant in the electricity value chain must accept responsibility for the sector’s condition.

“To the GenCos: you are owed. That is true, and I will not pretend otherwise,” he wrote, while criticising the industry’s dependence on tariff interventions and bailouts. (News Leverage)

His broader argument is that Nigeria needs to reconsider the assumption that a single national electricity system should remain the dominant route to powering a population of more than 200 million people.

He proposed a more decentralised model in which states, communities, estates and private investors could develop local electricity systems, particularly through solar generation.

“Every village, every estate, every community in Nigeria should have its own PHCN,” Murray-Bruce wrote. (Western Post)

Under his proposal, states would help guarantee financing for local projects and take responsibility for electricity needs such as street lighting, schools, primary healthcare centres and police stations, while the Federal Government would concentrate on federal institutions and infrastructure.

The proposal comes against the background of the Electricity Act 2023, which changed Nigeria’s electricity framework by giving states a greater role in the sector.

That transition is already taking shape.

NERC has recently transferred regulatory oversight to the Akwa Ibom State Electricity Regulatory Commission, while the regulator has also taken intervention measures against Kaduna Electricity Distribution Company over repeated failures to meet market obligations and prescribed performance indicators. (NERC)

These developments suggest that the future of Nigeria’s electricity market may increasingly involve a mixture of national, state and decentralised systems rather than dependence on a single structure.

Yet decentralisation alone will not solve the sector’s financial problems.

Whether electricity is generated by a national utility, a state-backed company, a community project or a private operator, the same fundamentals remain: power must be generated reliably, transmitted efficiently, metered accurately, billed transparently and paid for.

NERC’s latest report shows weaknesses at several of those points simultaneously.

The sector recorded two grid collapse incidents in 2025, including a full collapse on September 10 and a partial collapse on December 29.

The December incident was linked by NERC to the failure of one circuit breaker on the Benin-Onitsha 330kV line at the Benin Transmission Station.

The financial picture therefore cannot be separated from the physical condition of the electricity system.

Poor infrastructure increases technical losses. Poor metering weakens billing accuracy. Weak collections reduce the money available to maintain networks.

Insufficient liquidity affects generation payments. Weak generation then reduces the quality of supply, making consumers increasingly reluctant or unable to remain dependent on the grid.

It is a cycle that has proved remarkably difficult to break.

The customer numbers also tell part of the story.

NBS reported that Nigeria had 12.16 million electricity customers in the fourth quarter of 2025, an increase of 1.11 per cent from the previous quarter but an 8.52 per cent decline from 13.30 million in the fourth quarter of 2024. (Punch Newspapers)

That annual decline is significant because electricity customers are not merely statistics.

A shrinking formal customer base can also reflect the growing tendency of households, businesses and industries to seek alternatives where the public grid is unreliable or too expensive.

The challenge facing President Tinubu is therefore larger than recovering N1.36 trillion in lost billing and collections.

The more important task is to determine why such a large amount can disappear between electricity supply and actual revenue in the first place.

Nigerians have heard repeated promises of reform, improved generation, better transmission and expanded metering.

The latest NERC report shows that some progress has been made, particularly in metering and revenue collection during parts of the year. But it also demonstrates how far the sector remains from financial and operational stability.

Murray-Bruce’s intervention is deliberately provocative, but it raises a legitimate question about whether Nigeria should continue trying to repair the same structure or begin designing a fundamentally different one.

The answer will require more than another tariff adjustment or government subsidy.

It will require stronger capitalisation of market participants, tighter regulatory enforcement, transparent metering, credible billing, improved collection, investment in transmission and distribution infrastructure, and a clear framework for state and decentralised electricity markets.

For consumers, the desired outcome is ultimately simple.

They want electricity that is available, measurable and fairly priced.

For investors and operators, the requirement is equally straightforward: a market in which the revenue collected from electricity sales is sufficient to support the investment needed to keep that electricity flowing.

Until those two interests meet, Nigeria’s power crisis will remain both a financial problem and a daily human burden.

The N1.36 trillion revenue gap is therefore more than an alarming number in an annual report.

It is a measure of how much value Nigeria’s electricity system was unable to convert into sustainable revenue in a single year.

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The challenge for the government is to ensure that the figure becomes a warning that prompted meaningful reform, rather than simply another staggering statistic in the country’s long-running electricity story.