The Lagos State Electricity Regulatory Commission (LASERC) is targeting a reduction of Aggregate Technical, Commercial and Collection (ATC&C) losses to below 10 percent through the deployment of artificial intelligence monitoring tools.
Chief Executive Officer of LASERC, Mrs. Temitope George, disclosed the target during a recent interview with Nairametrics, stating that the commission intends to use technology to hold electricity providers accountable for poor service delivery and inefficiency.
ATC&C losses represent the total energy lost between the point of supply and the point of consumption. This includes technical losses, such as energy dissipated as heat in transformers and cables, and commercial losses, which encompass energy theft, meter bypassing and non-payment of bills by consumers.
The push for a sub-10 percent loss threshold aligns Lagos with global best practices in utility management. In many developed markets, efficient grids maintain low ATC&C losses, ensuring that distribution companies remain financially viable without relying on excessive tariff hikes or government subsidies.
Under the new strategy, AI monitoring will be used to detect anomalies in energy consumption and identify precise locations of energy theft in real-time. By analyzing data patterns across the distribution network, the regulator aims to pinpoint where losses are occurring and compel providers to fix leakages or prosecute offenders.
Regulatory Pressure on Electricity Distribution Companies
The commission is also implementing a strict 12-month limit on the recovery of electricity charges. This measure is designed to prevent distribution companies from accumulating massive arrears and then attempting to recover them from consumers through arbitrary “estimated billing” or sudden large back-charges.
Mrs. George explained that the 12-month window forces providers to be more diligent in their billing and collection processes. If a provider fails to bill a customer accurately within a year, the regulator may restrict their ability to recover those specific legacy debts, shifting the financial risk from the consumer to the utility company.
This move comes as LASERC addresses a high volume of billing and metering complaints from Lagos residents. The commission has indicated that it will use these complaints as data points to evaluate the performance of providers and determine whether they are meeting the minimum standards of service.
The shift toward state-level regulation is made possible by the Electricity Act 2023, which decoupled the power sector and allowed states to regulate their own electricity markets. Lagos was among the first states to aggressively move toward establishing its own regulatory framework to address the unique energy demands of Nigeria’s commercial capital.
Previously, the Nigerian Electricity Regulatory Commission (NERC) held exclusive authority over the entire value chain. However, the decentralisation allows LASERC to implement more localised and stringent KPIs for distribution companies operating within the state.
For investors and energy companies, the transition means a more complex regulatory environment where they must comply with both federal guidelines and specific state mandates. The introduction of AI-driven monitoring suggests that the era of estimated billing and unaccounted-for energy losses in Lagos will face significantly higher scrutiny.
LASERC’s next phase involves a comprehensive audit of existing metering gaps and the implementation of a more transparent dispute resolution mechanism for consumers. The commission is expected to publish periodic performance reports on distribution companies to create a competitive environment based on efficiency and reliability.
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