The beautiful colleague who composed Dataphyte’s daily Data Card passed the latest draft on Friday.
I perused with mixed feelings 🤷
Then the handsome colleague that designed it came up with lit graphics that captured the mood of media reports that day – the National Bureau of Statistics (NBS) Electricity Report Q1 2023 which reviewed the performance of the 11 Electricity Distribution Companies (DisCos) in the first 3 months of the year.
Most of the news headlines and coverage focused on the increased revenue of the DisCos, plus a passing mention of the amount of electricity these companies actually supplied to earn another fabulous revenue of N247.3 billion in the first quarter of 2023.
“Revenue collected by the DISCOs during the period was N247.33 billion from N232.32 billion in Q4 2022. On a year-on-year basis, revenue generated in the reference period rose by 20.81% from N204.74 billion recorded in Q1 2022. Electricity supply was 5,852 (Gwh) in Q1 2023 from 5,611 (Gwh) in the previous quarter. However, on a year-on-year basis, electricity supply declined by 1.74% compared to 5,956 (Gwh) reported in Q1 2022, the NBS reported.”
The devil is in the (last) detail – that last sentence – one that is easily missed, especially at a time Nigerians are weighed down by anxiety and apathy towards the looming increase in electricity tariffs, planned for next month.
Yet, the problem surpasses the coming high electricity tariffs that will warrant one to pay higher bills. The dilemma is the likelihood of a higher bill and lower electricity supply.
This has been the case.
These 10 Charts throw more light on this.
First, the N247 billion the 11 DisCos jointly received from paid electricity bills between January and March this year (the first quarter) is a little addition to the N828 billion revenue collected from Nigerians last year.
In 2022, the N828.1 billion revenue from paid bills to Nigerian DisCos surpassed the N761.2 billion in 2021.
Yet, these 11 companies supplied 21,817 Gwh of electricity in 2022 lesser than the 23,361 Gwh in 2021.
Within 8 years, the 11 DisCos together tripled their revenues (an increase of 197%) but barely increased their supply of energy to their customers (an increase of 7%) for almost a decade.
Over the years, DisCos supply of electricity to their customers was never proportional to the revenue they got off their customers.
Between earnings and efficiency, Nigeria’s electricity retailers chose the former in the past 8 years.
I shared my findings with another colleague, and he suggested we delay our conclusions. He reminded me that the revenue figures were nominal estimates. Inflation across the years could have inflated the actual value of those seemingly high revenues.
Hmm. 🤔
That’s true. Let’s see what these revenue figures would be reduced to after factoring in inflation.
After factoring in inflation, the real revenue of the 11 DisCos still tripled (x2.6 or an increase of 165%) within 8 years without any significant increase in the supply of electricity to their customers in all those 8 years.
How can this be?
Let’s simulate.
DisCos’ customers increase annually due to growing populations.
If some bad guys run the DisCos, all they need is to connect more and more customers, then sit and relax.
With arbitrary estimated billings of unmetered customers, it is easy to get 10 hours of revenue for 1 hour of electricity supplied.
If these bad guys need more money, they turn to their metered customers at frequent intervals. They complain and collude to increase the electricity tariff, that is, the price of each electricity unit, so they can milk the metered customers too.
But the DisCo guys are not bad guys. They don’t think like this. They measure out energy supplied without a meter because their brains can know how much you use than a meter can do.
And often times people have complained that the DisCos even underestimated their bill. 🤭
It is easy to find many unmetered customers who return from their travel and come straight to the DisCos’ offices complaining that they were not billed for the electric energy they consumed when they were away from home.🙃
Now we’re clear about this. There is little or no effect of inflation on the high revenues that DisCos declare annually. As for the Nominal Revenue figures, growth in supply was not always commensurate with the growth in inflation-adjusted revenue of DisCos.
Second, it is useful to know the DisCo you’re dancing with, sorry, dealing with, as you move across the country.