Power: Gencos’ Invoices Drop by N80.56bn Amid Weak Demand

Power generation companies (GenCos) recorded an N80.56bn drop in total invoices in the third quarter of 2025, driven by a decline in electricity offtake by distribution companies (DisCos), according to industry data.

The Nigerian Electricity Regulatory Commission (NERC) reported in its Q3 2025 bulletin that GenCos billed N782.46bn during the period, down from N863.02bn in Q2 2025.

The decline in invoices reflected a 6.08 per cent reduction in energy offtake by DisCos, which also contributed to a lower Federal Government subsidy requirement, falling from N514.35bn in Q2 to N458.75bn in Q3.

NERC noted that the current open-ended subsidy arrangement exposes the government to variable obligations due to volumetric risks and changes in generation costs, particularly when thermal generation increases overall costs. “The 6.08 per cent reduction in DisCos’ energy offtake between Q2 and Q3 2025 was the main factor behind the decline in total GenCo invoices (N782.46bn vs. N863.02bn) and subsidy obligations (N458.75bn vs. N514.35bn). The existing subsidy framework leaves the government vulnerable to indeterminate obligations due to volumetric risks and generation cost fluctuations caused by shifts in the energy mix,” the commission said.

Monthly subsidy obligations during the quarter were N163.7bn in July, N153.32bn in August, and N141.72bn in September. Under the DisCos’ Remittance Obligation (DRO) framework, the government covers the gap between cost-reflective tariffs and approved tariffs, applying the subsidy to generation costs payable by DisCos to the Nigerian Bulk Electricity Trading Plc (NBET) at source. In Q3 2025, the DRO-adjusted invoice from NBET to DisCos was N323.70bn, while total remittances reached N308.25bn, representing a 95.23 per cent remittance performance.

All DisCos except Kano, Benin, Jos, and Kaduna achieved full remittance. Jos DisCo improved by 4.29 percentage points compared to Q2, while Benin, Kaduna, and Kano saw slight declines.

For transmission and administrative service costs billed by the Market Operator, DisCos remitted N73.03bn of N76.77bn, translating to 95.13 per cent compliance, with only Jos and Kaduna falling short.

Analysts noted that the reduction in DisCos’ energy offtake would directly affect GenCos’ revenue while also lowering the volume of electricity distributed to end consumers.