The first quarter of 2025 marked a significant turning point for Nigeria’s power grid, achieving a period of uninterrupted stability, a stark contrast to the frequent collapses that plagued the system in previous years. This achievement, highlighted in the Nigerian Electricity Regulatory Commission’s (NERC) Q1 2025 report, was attributed to improved grid management practices. While the grid remained stable, operating within the stress tolerance bands for frequency and voltage, these metrics still fell outside optimal ranges defined by the Grid Code. The average lower daily frequency was 49.28Hz and the upper daily frequency was 50.77Hz, both outside the normal operating limits of 49.75Hz to 50.25Hz. This sustained operation outside optimal parameters indicates lingering vulnerabilities within the system and underscores the need for continued efforts to improve grid performance. The achievement of zero grid collapses, compared to twelve in 2024, is nevertheless a significant stride towards a more reliable power supply.
Despite the improved grid stability, the report revealed persistent challenges in other aspects of the power sector. The financial performance of the eleven Distribution Companies (DisCos) presented a mixed picture. While remittance performance improved slightly to 95.86%, reaching N414.26 billion out of a total invoice of N432.13 billion from the Nigerian Bulk Electricity Trading (NBET) company and the Market Operator (MO), their collection efficiency declined. The DisCos collected N553.63 billion out of N744.27 billion billed to customers, representing a collection efficiency of 74.39%, a decrease of 3.05 percentage points from the previous quarter. This drop in collection efficiency had a direct impact on the Aggregate Technical, Commercial, and Collection (ATC&C) losses, which rose to 39.61%, significantly exceeding the 20.54% benchmark set by the 2025 Multi-Year Tariff Order. This high loss rate, translating to a cumulative revenue loss of N200.495 billion, further emphasizes the need for enhanced efficiency within the DisCos’ operations.
The high ATC&C loss was a pervasive issue across all DisCos, with none meeting their individual loss targets. Kaduna Electric recorded the highest loss at 68.57%, significantly deviating from its 21.32% target. This widespread failure to control losses underlines systemic inefficiencies within the distribution segment of the power sector, contributing to financial instability and hindering overall sector performance. The revenue shortfall further complicates the financial viability of the DisCos, potentially impacting their ability to invest in infrastructure upgrades and improve service delivery. The combination of improved remittance yet declining collection efficiency points to a complex interplay of factors affecting the financial health of the DisCos, requiring a nuanced approach to address these interconnected challenges.
The report also highlighted challenges with payment compliance, both domestically and internationally. International bilateral customers remitted only $5.8 million out of a total invoice of $17.24 million, representing a low remittance rate of 33.70%. Domestic bilateral customers fared better, remitting N1.86 billion out of N2.57 billion invoiced, achieving a 72.24% remittance rate. These discrepancies in payment compliance further underscore the financial pressures faced by the sector, highlighting the need for stronger enforcement mechanisms and improved contractual arrangements to ensure timely payments and maintain financial stability.
Progress in metering deployment continued, albeit at a modest pace. During Q1 2025, 187,194 meters were installed, a marginal increase of 0.41% from the previous quarter. This brought the national metering rate to 46.98%, with the Meter Asset Provider (MAP) scheme accounting for the majority of installations (79.44%). Other metering initiatives, including the Meter Acquisition Fund, DisCo-financed projects, and vendor-financed efforts, contributed to the overall deployment. While the continued progress in metering is positive, the slow pace of deployment highlights the need for accelerated efforts to achieve universal metering and address issues of estimated billing, a major source of customer dissatisfaction.
Customer service remained a persistent challenge, with DisCos resolving only 37.27% of complaints escalated to the NERC Consumer Complaints Unit. While the total number of complaints received by Disco CCUs decreased by 7.72% compared to the previous quarter, the low resolution rate points to persistent shortcomings in customer service delivery. Metering, billing, and service interruptions were identified as the leading causes of complaints, highlighting the need for DisCos to prioritize improvements in these key areas. Furthermore, the report highlighted safety concerns, with 31 accidents recorded during the quarter, resulting in 14 injuries and 12 fatalities. NERC has initiated investigations into these incidents and pledged to strengthen safety oversight to prevent future occurrences.
In conclusion, the first quarter of 2025 represented a milestone for Nigeria’s power grid with the achievement of zero grid collapses. However, the report also highlighted ongoing challenges related to voltage and frequency stability operating outside optimal ranges, DisCo collection efficiency, ATC&C losses, payment compliance, metering deployment, and customer service. These persistent issues underscore the need for continued regulatory oversight, enhanced operational efficiency, and increased investments in infrastructure and customer service to build a more robust and reliable power supply ecosystem. NERC’s commitment to enforcing compliance, improving service delivery, and holding operators accountable is crucial to achieving sustainable progress in the Nigerian power sector.
