Tariff Cockpit

⚠ Estimate — band tariffs are rounded NERC figures; cost inputs are illustrative teaching estimates.

What should 1 kWh of electricity cost?

Cost vs revenue, Band A to E · illustrative estimates, not NERC's official breakdown

True cost to deliver 1 kWh (cost-reflective)

₦210/kWh

Generation & gas₦95
Paid for losses₦52
Transmission (TCN)₦17
Distribution (DisCo)₦40
Levies & regulator₦6

Band A customer (20+ hrs/day)

Pays (NERC tariff)₦209/kWh

True cost₦210/kWh

Gap per kWh₦1 (1%)

Customer covers 99% of the cost

Whole country, per year HYPOTHETICAL

Average tariff paid₦115/kWh

Energy billed22.8 bn kWh

Revenue gap₦2.2T

Someone pays this gap: government subsidy, or unpaid GenCos and gas suppliers.

Service bands A–E

Tap a band — fewer hours of supply, lower tariff, bigger gap

Your monthly bill

Band A

Units used per month150 kWh

You pay

₦31,350

Real cost of your power

₦31,564

Upstream drivers

Drag the dials

Gas price

Exchange rate

Hydro share

Losses (ATC&C)

Grid & DisCo charges

₦ per kWh — illustrative

Transmission (TCN)

Distribution (DisCo)

Grid line loss

Levies

From gas to 1 kWh: the sums

Move any knob — these sums, the dials and the cockpit above all update together. Exchange rate changes every naira figure.

Gas price (base)$2.42/MMBtuPipeline transport$0.80/MMBtuHeat rate (lower = more efficient plant)10.5 MMBtu/MWhExchange rate₦1,450/$Plant running cost$0.035/kWh

1. Gas bought at the plant$2.42 + $0.80 transport$3.22/MMBtu = ₦4,842 per 1,000 cubic feet
2. Gas burned for 1 kWhheat rate 10.5 ÷ 1,0000.0105 MMBtu ≈ 10.1 cubic feet
3. Power from 1,000 cubic feet1,000 ÷ 10.198.8 kWh (plant efficiency 32%)
4. Gas cost per kWh$3.22 × 0.0105$0.0338/kWh
5. Into naira$0.0338 × ₦1,450₦49/kWh
6. Add plant running cost$0.035 × ₦1,450 = ₦51₦100/kWh at the plant gate (gas only)

Gas is 49% of the gas-plant cost. Mixed with 25% hydro, generation is ₦95/kWh before losses — part of the ₦210/kWh true cost above.

Typical pipeline natural gas: about 1,037 Btu per standard cubic foot (US EIA average heat content). Nigerian gas varies slightly by field. 1 MWh of electricity = 3.412 MMBtu of heat.

From falling water to 1 kWh: the sums

Kainji, Jebba, Shiroro, Zungeru: no fuel, but big loans and upkeep. Every knob moves the dials and cockpit above too.

Water in the dams (capacity factor)55%Loan & capital repayment$0.012/kWhUpkeep & imported spares$0.006/kWhConcession & water fees$0.0020/kWhHydro share of the grid25%Exchange rate₦1,450/$

1. Fuel billwater is free₦0/kWh
2. How hard the dam runs55% of the year at full power4,818,000 kWh per MW per year
3. Spread fixed costs55% ÷ 55%× 1.00 on every fixed cost
4. Loan & capital per kWh$0.012 × 1.00$0.0120/kWh
5. Upkeep + concession$0.006 + $0.002, × 1.00$0.0080/kWh
6. Into naira$0.0200 × ₦1,450₦29/kWh at the dam

Hydro ₦29/kWh vs gas ₦100/kWh — 71% cheaper.

With 25% hydro in the mix, generation is ₦95/kWh before losses.

Hydro has no fuel bill. Fixed yearly costs (loan repayments, upkeep, concession fees) are spread over the kWh the dam produces, so a full reservoir (Aug–Dec, ~75–85% capacity factor) makes each kWh cheaper and a low one (Feb–May, ~30–50%) makes it dearer. Teaching estimates; amounts set at a 55% annual-average capacity factor.

Where the money goes: daily grid cash flow

Estimate

One day of grid power, from power plant to cash in the bank. Move any slider — every stage below moves with it.

Average generation4,089 MWPrice per kWh₦100Grid loss before DisCos21.8%DisCo loss before billing16.8%Bills actually paid78.0%

1 · Generated at power plants₦9.81bn · 98.1M kWh
2 · Received by DisCos₦7.67bn · 76.7M kWh
−₦2.14bn lost on the grid
3 · Billed to customers₦6.39bn · 63.9M kWh
−₦1.29bn lost before billing
4 · Cash actually collected₦4.98bn · 51% of generated value
−₦1.41bn billed but never paid

Leaked every day (lost + unbilled + unpaid)

₦4.83bn

₦1.8T a year.

Cash collected every day

₦4.98bn

₦1.8T a year, out of ₦3.6T gross.

Gross value is not profit — fuel, running costs and debt come first. Default grid and billing losses come from NERC Q2 2026 (DisCos received 6,982 GWh, billed 5,812 GWh over 91 days). Collection efficiency is an illustrative estimate pending the exact NERC Q2 2026 figure. Sources: NERC — September 2026 average grid generation (as reported by The Times NG); NERC Quarterly Report Q2 2026.

ATC&C losses: where the DisCo money leaks

Estimate

ATC&C = Aggregate Technical, Commercial & Collection losses. Every lost or unpaid kWh still has to be bought — so it pushes up the true price and the government's subsidy bill.

Technical10.0%Heat lost in old wires and overloaded transformersCommercial8.0%Theft, bypassed meters, estimated billsCollection15.5%Bills sent but never paid

Total ATC&C loss

30.0%

True cost of 1 kWh

₦211

was ₦210 at 30%

National yearly shortfall

₦2.18T

was ₦2.18T

This is roughly today's loss level. Move a slider down to see how much subsidy fixing it would save.

Illustrative split of a ~30% ATC&C loss into technical, commercial and collection losses. Not an official NERC breakdown. Shortfall is HYPOTHETICAL: billed kWh from today's utilised MW × (true cost − average tariff paid). Formula: ATC&C = 1 − (1 − technical)(1 − commercial)(1 − collection).

Source: NERC Multi-Year Tariff Order (MYTO) & Band A orders (2024–2026). Band tariffs are rounded averages across the 11 DisCos. Cost inputs are illustrative teaching estimates, not NERC's official cost breakdown. Please verify against the current NERC order.