**Interview with Emmanuel Addehin, Abuja**
Interviewer: Emmanuel, I’ve been reading about the recent surge in revenues for electricity Distribution Companies, or Discos, in Nigeria. Can you give us some background on this phenomenon?
Emmanuel Addehin: Absolutely. In April, the Nigerian Electricity Regulatory Commission (NERC) approved a staggering 230% tariff hike for Band ‘A’ customers, which has resulted in a revenue increase of over 61.4 percent. By July 2024, Discos reported earnings of N162.1 billion, up from N100.4 billion in March, just as the new tariff structure took effect.
Interviewer: That’s quite an impressive increase! Yet, there seem to be rising complaints from consumers, particularly in Abuja and Lagos. What are they primarily concerned about?
Emmanuel Addehin: You’re right. Many consumers are frustrated, as they’ve been moved to Band ‘A’ without receiving the promised 20 hours of power supply. For example, residents in Abuja staged protests in September, claiming they get less than 10 hours of electricity a day. They’re also upset that these transitions occur without any notice.
Interviewer: Can you explain the different tariff bands?
Emmanuel Addehin: Sure! The tariff bands are set as follows: Band ‘A’ requires 20 to 24 hours of supply daily; Band ‘B’ guarantees at least 16 hours; Band ‘C’ includes 12 hours; Band ‘D’ offers a minimum of eight hours; and Band ‘E’ allows for just four hours daily.
Interviewer: What about the collection efficiency related to this revenue?
Emmanuel Addehin: According to NERC’s data from July, Discos achieved a collection efficiency of 82.26%, with a recovery rate of 72.38%. For customers receiving subsidies, they collected about N83.77 from an average tariff of N115.74 per kWh.
Interviewer: How do you assess the overall financial performance of the Discos for this year?
Emmanuel Addehin: A recent analysis indicates that in the first quarter of 2024, the 12 power distributors brought in around N291.6 billion, climbing to N433 billion in the second quarter. After a two-year suspension on tariffs, the federal government increased the rate for Band ‘A’ from roughly N68 to N225 per kWh, and it’s currently at N209 per kWh. Overall, in the first seven months of 2024, Discos have collected N886.74 billion, surpassing their total revenue for all of 2020.
Interviewer: What implications does this have for infrastructure investment in the electricity sector?
Emmanuel Addehin: With these increased revenues, it’s expected that Discos will reinvest some of that money into much-needed infrastructure development. However, there’s an ongoing critique that they have historically under-invested, which has left many Nigerians reliant on self-generated power rather than the national grid.
Interviewer: What challenges do you foresee for the Discos going forward?
Emmanuel Addehin: The persistent challenges include government regulations that hinder their ability to implement cost-reflective tariffs, which limits their investment capacity. They also contend with issues like vandalism of electrical infrastructure and widespread electricity theft.
Interviewer: Are there any positive developments on the horizon?
Emmanuel Addehin: Yes! Recently, the Minister of Power, Adebayo Adelabu, announced that Nigeria is targeting a generation and supply of 6,000 MW of electricity by the end of this year.
Interviewer: Thank you for these valuable insights, Emmanuel. It’s crucial for consumers to grasp the complexities within the electricity sector.
