The Federal Government of Nigeria spent N321.26 billion on electricity generation subsidies in the second quarter of 2026. This information was disclosed by the Nigerian Electricity Regulatory Commission (NERC) in its second-quarter 2026 report. The subsidy covered part of the cost of electricity generation, allowing the government to maintain electricity tariffs at the July 2024 rates. This intervention represented about 50 percent of the total generation costs recorded during the quarter.
The subsidy effectively reduced the financial burden on Distribution Companies (DisCos). With the subsidy, the amount payable by DisCos to the Nigerian Bulk Electricity Trading (NBET) for electricity generation stood at N326.46 billion during the quarter. DisCos also incurred N83.92 billion in charges for transmission and administrative services provided by the Market Operator. This brought their combined upstream invoice obligation to N410.38 billion. Against this obligation, DisCos remitted N385.44 billion, consisting of N306.62 billion paid to NBET and N78.82 billion to the Market Operator.
The remittance performance of DisCos was 93.92 percent, which was marginally below the 94.08 percent recorded in the first quarter of 2026. NERC's figures highlighted a significant gap between the value of electricity supplied to DisCos and the amount ultimately billed to consumers. During the quarter, total energy offtake by DisCos was valued at N946.57 billion, while customers were billed N744.67 billion. This difference translated into a billing efficiency of 78.67 percent and billing losses of N201.90 billion.
Of the N744.67 billion billed to electricity consumers, DisCos collected N603.64 billion, resulting in a collection efficiency of 81.06 percent. This was an improvement of 2.11 percentage points compared with the 78.95 percent recorded in the first quarter of the year. However, the improvement in collections did not eliminate the broader revenue challenges confronting the distribution segment. The weighted average Aggregate Technical, Commercial and Collection (ATC&C) losses remained at 36.23 percent during the quarter.
NERC reported that technical and commercial losses accounted for 21.33 percent, while collection losses stood at 18.94 percent. The overall ATC&C loss was 19.31 percentage points higher than the 2026 Multi-Year Tariff Order target of 16.92 percent. This translated into a cumulative revenue loss of N129.073 billion across the Distribution Companies. Despite remaining significantly above the regulatory target, the loss level improved by 1.21 percentage points from the position recorded in the first quarter of 2026.
On electricity generation, NERC reported that Nigeria had 28 grid-connected power plants operating during the quarter. These plants comprised five hydroelectric facilities, two steam plants, 19 Open Cycle Gas Turbine plants, and two Combined Cycle Gas Turbine plants. The average available generation capacity during the period stood at 4,454.17 megawatts, representing a marginal decline of 3.80 megawatts or 0.09 percent from the 4,457.96 megawatts recorded in the first quarter.
The electricity market also recorded further activity on metering during the period, with 350,270 meters installed in the second quarter. This represented a 17.97 percent reduction from the 426,985 meters installed in the first quarter of 2026. By the end of June 2026, a total of 7,743,839 customers out of 12,589,486 active registered electricity customers in the Nigerian Electricity Supply Industry had been metered. This put the national metering rate at 61.51 percent, leaving a substantial proportion of electricity customers still dependent on estimated billing.
Key points
- The Federal Government spent N321.26 billion on power subsidies in Q2 2026.
- DisCos collected N603.64 billion from customers during the quarter.
- The national metering rate stood at 61.51 percent by the end of June 2026.
