For distribution companies in Nigeria, the declaration of Eligible Customer Regulation 2017 (Regulation No. NERC-R-111) by the Hon. Minister of Power, Works and Housing in November 2017 could have an impact on their customer numbers and revenues.
Our Eligible Customers Analysis Tool can present the impact analysis of the potential exit of Eligible Customers from the network, which will significantly influence the energy demand and by implication revenues considering also the cross-subsidy effect from larger customers to residential customers, and larger customers often have lower losses.
The Eligible Customers are those consuming a monthly average of 2MWh/h as set by the regulation. These Eligible Customers' consumption could be up to a very significant part of electricity billed to customers and their exit could result in very significant revenue loss.
Our tool can also identify the shortfall in current tariffs that will only be recovered in future years. Apart from a possible Competition Transition Charge (CTC) to help cushion the impact of the missing cross-subsidy effect provided by exiting Eligible Customers, our tool can analyse the required average tariff increase needed for the distribution company to be kept whole.