ATC&C “ATC&C Loss The Aggregate Technical, Commercial, and Collections Loss. This loss is the difference between the amount of electricity received by a Distribution Company from the Transmission Company and the amount of electricity for which it invoices its customers plus the adjusted collections loss.

ATC&C Loss considered as part of the cost of Generaton, Transmission and Distribution Part of incentives mechanism for operators Higher loss higher tariff Lower loss low tariff

ATC&C Sent-out from stations (GWh)GWh Transmission Losses% of SO Delivered to DistributionGWh Distribution Losses% of DD Delivered to customersGWh Non-technical losses (non-billed energy)% of DC Billed to CustomersGWh Revenue Collection losses% of Sales where Revenue is collectedGWh Revenue based sales as % of Sentout energy% Total technical and non technical losses% of SO

Base line Losses used During Privatization Distribution Company Baseline ATC&C Loss Figure Abuja Electricity Distribution Plc 35% Benin Electricity Distribution Plc 40% Eko Electricity Distribution Plc 35% Enugu Electricity Distribution Plc 35% Ibadan Electricity Distribution Plc 35% Ikeja Electricity Distribution Plc 35% Jos Electricity Distribution Plc 40% Kaduna Electricity Distribution Plc 40% Kano Electricity Distribution Plc 40% Port Harcourt Electricity Distribution Plc 40% Yola Electricity Distribution Plc 40%

Legal basis for Loss validation Section 5.3 of distribution tariff order: Given the urgency of the reform/privatisation agenda and also taking account of the uncertainty about the credibility of some of the data from which aggregate losses are calculated, NERC and BPE have agreed that: Commitments on the reduction of aggregate losses will remain one of the primary determinants for determining successful Disco core investors; NERC has already commenced a study to create a credible industry performance database, particularly as regards aggregate technical, commercial and collection (ATCC) loss data, which will take at least 12 months to undertake; Pending completion of the ATCC database study, the privatisation of the Disco sector may proceed and commitments made on the basis of current data; and At the conclusion of the ATCC database study, any difference in losses will be the subject of separate reduction targets to be agreed between NERC and the relevant Discos; and commensurate cost implications will be the subject of a Minor Review consultative process.

Guidelines on Sample selection for the Validation Of Customer Numbers 50% of the business Units Include BU’s in different states 10% of service centres at selected BU’s In selected service centres 100% of 33kV consumers In selected service centres 10% of 11kV consumers LV customer sample size to be 0.05% of MYTO-2 population

Level of losses Before and After Validation (%)- Abuja Disco TypeMYTO 2 /Pre- Validation After validation Transmission8.05 Technical/Distribution Commercial Collection ATC& C

Draft Figures - Abuja

Effect on Retail Tariff Before and After Load 2014 Sent-out from stations (GWh)GWh28,747 Transmission Losses% of SO8.05% Exports% of Exp5.0% Delivered to DistributionGWh25,111 Distribution Losses% of DD8.0%13.4% Delivered to customersGWh23,10221,756 Non-technical losses (non-billed energy)% of DC8.0%17.3% Billed to CustomersGWh21,25417,990 Revenue Collection losses% of2.0%31.9% Sales where Revenue is collectedGWh20,82912,253 Revenue based sales as % of Sent out energy%72%43% Total technical and non technical losses% of SO28%57% Average tariffN24N40

Conclusions 5 Discos submitted their report Expecting the remaining within the week NERC consultants to be in place soon Verification of the studies and have final result How to manage the effect of 100% increase in tariff after the validation