Meter bypass, electricity theft, poor metering and other commercial and technical losses have cost Nigeria’s electricity distribution companies about N2.47tn in unbilled electricity between 2020 and 2025, The PUNCH reports.
An analysis of annual reports released by the Nigerian Electricity Regulatory Commission shows that the value of unbilled electricity climbed steadily from N281.86bn in 2020 to N622.31bn in 2025 an increase of about 121 per cent over the six-year period.
The trend underscores the widening financial gap between the electricity delivered to customers by the 11 DisCos and the electricity for which they were actually able to raise bills.
The N2.47tn cumulative gap represents the value of electricity that went uncaptured in the DisCos’ billing over the period, with portions attributable to electricity theft and meter bypasses, as well as technical losses, poor energy accounting, inaccurate meters and inadequate customer enumeration.
Year-by-Year Breakdown
In 2020, the DisCos received electricity worth N1.098tn but billed only N816.16bn, leaving a shortfall of N281.86bn — equivalent to 25.67 per cent of the value of electricity received.
The unbilled value rose to N341.77bn in 2021, when the DisCos received electricity worth N1.459tn and billed N1.117tn. The gap represented 23.43 per cent of energy received, even though its naira value grew by N59.91bn, or 21.3 per cent, from the prior year.
In 2022, the DisCos received electricity worth N1.544tn and billed N1.185tn, leaving N358.26bn unbilled a rise of N16.49bn, or 4.8 per cent, from 2021, and 23.20 per cent of the value received.
The unbilled figure climbed further to N384.05bn in 2023, as the value of electricity received hit N1.847tn against N1.463tn billed. The gap grew by N25.79bn, or 7.2 per cent, year-on-year, representing 20.79 per cent of electricity received.
The gap widened sharply in 2024, reaching N478.29bn. The DisCos received electricity worth N2.675tn but billed N2.197tn, leaving 17.88 per cent unbilled a jump of N94.24bn, or 24.5 per cent, compared with 2023.
The largest gap in the six-year period came in 2025, when the DisCos received electricity worth N3.611tn but billed only N2.988tn, leaving N622.31bn, or 17.23 per cent, of the value unbilled a rise of N144.02bn, or 30.1 per cent, from 2024.
Overall, the value of unbilled electricity grew by N340.45bn, or 120.8 per cent, between 2020 and 2025, even as the proportion of unbilled value fell from 25.67 per cent to 17.23 per cent over the same period.
This means that while the DisCos improved their billing efficiency in percentage terms, the rapid growth in the monetary value of electricity supplied meant the absolute naira value of the billing gap kept rising.
However, the rise in the naira value of the gap does not necessarily mean the physical volume of electricity lost to theft or other commercial leakages doubled proportionally, as the value of electricity is also shaped by tariff levels and shifts in the value of energy supplied.
What Drives Billing Losses
NERC defines billing efficiency as the ratio of the value of electricity billed by a DisCo to the value of electricity supplied to a given area during a period.
The commission explained that billing losses stem from two broad drivers technical and commercial. “The key drivers of billing losses are i) technical – energy loss along the distribution network, and ii) commercial – DisCo’s inability to account for 100 per cent of the energy supplied,” NERC stated.
It added that commercial losses could stem from customers stealing electricity through meter bypasses or from factors within the DisCos’ own control.
According to NERC, “Some of the major factors that contribute to billing losses include; Energy Theft: this is the deliberate action by some electricity consumers to consume electricity without making payments; Poor Customer Enumeration: this is the inability of DisCos to identify all electricity consumers.
“Inaccurate Meters/Outdated Meters: this is the inability of DisCos to accurately measure the electricity consumed by end users due to the unavailability of meters or the use of obsolete meters at user sites; and Technical Loss: this is the energy loss to wires and transformers (technical losses) which also contributes to DisCos’ billing inefficiency, and this is particularly relevant for areas of the network with substandard or aged infrastructure.”
This distinction matters because the entire N2.47tn cumulative gap cannot be attributed solely to electricity stolen by customers. Rather, it reflects the total value of energy left out of the DisCos’ billing, with contributions from theft, meter bypass, technical losses, poor energy accounting, inaccurate meters and inadequate customer enumeration.
NERC illustrated the impact of billing inefficiency with an example: a 70 per cent billing efficiency means a DisCo supplying N100 worth of electricity to customers can only issue bills worth N70. “A billing efficiency of 70 per cent means that if a DisCo delivers N100.00 worth of electricity to customers, it is only able to issue bills worth N70.00 due to commercial losses,” the commission said.
Physical Energy Measure Shows Improvement
Despite the rising naira value of unbilled losses, the physical-energy measure of billing efficiency improved over the period. NERC reported that the DisCos received 29,819GWh in 2020 and billed 22,163GWh to end-users a billing efficiency of 74.33 per cent.
In 2021, the DisCos received 30,494GWh and billed 23,448GWh, lifting billing efficiency to 76.57 per cent. The figure edged up to 76.79 per cent in 2022, with 28,351.62GWh received and 21,770.79GWh billed.
In 2023, the DisCos received 29,979.46GWh and billed 23,747.75GWh, pushing billing efficiency to 79.21 per cent. In 2024, 29,126.27GWh was received and 23,919.68GWh billed, putting efficiency at about 82.12 per cent.
By 2025, the DisCos received 31,251.77GWh and billed 25,867.86GWh, translating to an 82.77 per cent energy accounting efficiency.
The improvement suggests a growing share of the physical electricity received by the DisCos was being captured through billing. Yet the rising naira value of the unbilled gap shows that its financial impact grew more significant as the overall value of electricity supplied increased.
NERC’s 2025 report put the total naira value of energy supplied by the DisCos at N3.683tn, against N2.988tn billed a billing efficiency of 81.14 per cent resulting in billing losses of N694.80bn for the year.
According to NERC, “DisCos cumulatively recorded billing losses of N694.80bn, driven largely by a combination of i) commercial losses, including energy theft and poor energy accounting; ii) inability of DisCos to bill energy at the weighted average allowed tariff.”
Wide Disparities Among DisCos
The commission’s figures also revealed significant variation among the DisCos. Eko DisCo recorded the highest billing efficiency at 95.41 per cent, followed by Ikeja at 90.77 per cent and Kano at 90.26 per cent. At the bottom end, Yola posted the lowest billing efficiency at 60.99 per cent, followed by Kaduna at 61.56 per cent and Benin at 66.18 per cent.
This disparity indicates that the problem is not uniform across the distribution network, and that DisCos’ ability to account for and bill electricity varies considerably by franchise area.
Industry Voices on Electricity Theft
Earlier this month, the Managing Director and Chief Executive Officer of Abuja Electricity Distribution Company, Chijioke Okwuokenye, said in an interview that electricity theft including meter bypass and tampering remains a major driver of commercial and technical losses within the distribution network.
He said such losses reduce the revenue available for operating, maintaining and expanding electricity infrastructure, potentially resulting in poorer service quality, more frequent outages, delayed network upgrades and reduced investment in customer service.
Okwuokenye noted that electricity theft carries broader economic implications, as it can discourage investment in the power sector. “It can also undermine the sustainability of the electricity market and increase the financial burden on customers who comply with the rules,” he said.
He warned that manipulating or bypassing electricity meters, meter seals and service cables constitutes a serious offence under applicable electricity laws and regulations. “Offenders may also face criminal investigation and prosecution, including fines or imprisonment,” he said.
He added that customers using unauthorised metering services could face inaccurate consumption records, rejection of meters during verification, loss of warranties and legal consequences where fraud is involved.
Okwuokenye said funds spent replacing or repairing vandalised equipment could instead be channelled into network expansion, maintenance and service improvements. He urged customers and communities to report suspected electricity theft, meter tampering, vandalism and other dangerous activities involving electricity infrastructure.
In a similar vein, Jos Electricity Distribution Plc raised the alarm in July over the growing incidence of electricity theft in Plateau State, revealing that about 45 per cent of energy supplied to the state is lost to illegal activities.
JED’s state Chief Operating Officer, Hamisu Jigawa, described electricity theft as one of the company’s biggest challenges, warning that the high level of energy losses could undermine efforts to improve electricity supply in the state. “The issue of energy theft has become a serious challenge for us as a company. In Plateau alone, about 45 per cent of our energy is lost to theft. No business can survive with such a high level of losses,” he said.
A Separate but Related Problem: Transmission Losses
The billing gap described above is distinct from the Transmission Loss Factor, which measures electricity lost on the transmission network. The TLF resulted in an estimated N2.61bn loss in the first quarter of 2026, after the Transmission Company of Nigeria failed to meet the loss target set by NERC.
Unlike the billing gap, TLF measures losses on the transmission network operated by the TCN, rather than electricity DisCos fail to capture through customer billing. It relates specifically to electricity lost on the transmission network before delivery to distribution companies.
NERC defines TLF as the proportion of energy sent out by generating companies that is not delivered to DisCos or exported, because it is lost during transmission, resulting in monetary loss across the electricity value chain.
The transmission loss factor also rose over most of the period, climbing from 7.34 per cent in 2020 to 8.21 per cent in 2024, before easing to 8.01 per cent in 2025.
In 2021, average TLF stood at 7.45 per cent, up 0.11 percentage point (1.5 per cent) from 2020. It rose further to 7.87 per cent in 2022, an increase of 0.42 percentage point, or 5.6 per cent, year-on-year.
The upward trend continued in 2023, with TLF climbing to 8.17 per cent a 0.30 percentage point, or 3.8 per cent, increase. The highest TLF in the six-year period came in 2024, at 8.21 per cent, up 0.04 percentage point, or 0.5 per cent, from 2023.
The TLF then declined to 8.01 per cent in 2025, a reduction of 0.20 percentage point, or 2.4 per cent, from the previous year.
Despite the 2025 decline, TLF remained 0.67 percentage point higher than the 7.34 per cent recorded in 2020 a 9.1 per cent increase over the six-year period.
NERC explained that the 7 per cent target represents the maximum efficient transmission loss recoverable through customer tariffs, noting: “When TLF exceeds the target set, the additional cost is borne solely by TSP because there is no provision to recover revenues needed to cover excess (inefficient) losses from customers.”
The distinction between the two measures underscores that tackling electricity theft and billing gaps cannot be achieved through investment in transmission infrastructure alone. It requires improved metering, accurate customer enumeration, stronger enforcement against meter bypass and energy theft, better energy accounting by DisCos, and more effective monitoring of electricity flows from the transmission network to individual customers.
