The total invoice issued by power generation companies declined by N80.56bn in the third quarter of 2025, driven by a drop in energy offtake by electricity distribution companies, industry data shows.

According to the Nigerian Electricity Regulatory Commission’s Q3 2025 report, GenCos billed N782.46bn in Q3 2025, compared with N863.02bn in the preceding quarter.

The decline followed a 6.08 per cent reduction in energy offtake by DisCos and also led to a lower Federal Government subsidy burden, which fell to N458.75bn from N514.35bn within the same period.

The report highlighted that the current open-ended subsidy framework leaves the government exposed to unpredictable subsidy obligations, driven by volumetric risks and fluctuations in generation costs. These costs often rise when thermal generation increases within the energy supply mix.

“6.08 per cent reduction in energy offtake by DisCos between 2025/Q3 and 2025/Q2 was the key driver for the reduction in the total GenCo invoice (N782.46bn vs. N863.02bn) and subsidy (N458.75bn vs. N514.35bn) across the period. The current open-ended subsidy regime leaves the FGN exposed to indeterminate subsidy obligation because of volumetric risk; generation cost variation arising from changes in supply mix (more thermal = higher generation cost),” NERC said.

It further noted that the government’s monthly subsidy obligations for the quarter were N163.7bn in July, N153.32bn in August, and N141.72bn in September.

Under the DisCos’ Remittance Obligation framework, the government bridges the gap between cost-reflective tariffs and the approved tariffs, applying the subsidy directly to the generation costs that DisCos owe to the Nigerian Bulk Electricity Trading Plc.

For transmission and administrative service charges billed by the market operator, DisCos remitted N73.03bn of the N76.77bn invoiced, representing a 95.13 per cent remittance rate, with Jos and Kaduna being the only DisCos that did not remit in full.