1.0. INTRODUCTION Huge debt profiles, non-willingness to pay and the vice of electricity theft are prevalent components in the Nigerian Electricity Supply Industry (NESI). The aforementioned factors contribute to the huge liquidity gap in the NESI. The negative effect of energy theft cannot be overemphasized as the huge liquidity gap in the NESI affects all aspects of the value chain from generation to distribution. This, in turn diminishes the quantity and quality of electricity service delivery. In recent times, to curb the menace of energy theft, efforts have been intensified by the Distribution Companies (DisCos) in collaboration with the Economic and Financial Crimes Commission (EFCC). However, an aspect of this vice often left out is the issue of inaccurate customer enumeration of some residential maximum demand, commercial and industrial customers by the DisCos. 1.1 PROBLEM STATEMENT Electricity customers in Nigeria are classified into diverse broad categories which are: Residential (R1, R2, R3 & R4), Commercial (C1, C2 & C3), Industrial (D1, D2 & D3), Special (A1, A2 & A3) and Street lighting (S1) by the Nigerian Electricity Regulatory Commission (NERC) as contained in the amended 2015 Multi-Year Tariff Order (MYTO) 2.1. However, it is important to note that the eleven (11) DisCos have peculiar rates per kWh of electricity. The purpose of this study is to evaluate the commercial losses borne by the DisCos as a function of improper billing methods as opposed to the specified structures as set out in the MYTO 2.1 schedule. This is especially true for maximum demand, commercial and industrial customers who are billed on the inappropriate customer class category. The implication of this is that electricity is ineffectively priced. This further leads to huge commercial losses experienced by the DisCos. 1.2 SCENARIO ANALYSIS Example 1: Suppose an Industrial Firm in Lagos consumes 10kW/h for 10 hours daily in June 2017 but is billed based on R2 like most residential customers. It means that commercial losses to IKEJA DISCO for June 2017 is: Billing based on R2 Customer Classification: 30 days * 10 hours * N21.30/kWh * 10kWh = N63,900/Month Billing based on D2 Customer Classification: 30 days * 10 hours * N37.54/kWh * 10kWh = N112,620/Month Therefore, commercial loss to IKEJA DISCO is N112,620 – N63,900 = N48,720/Month. Example 2: Suppose a Commercial Hub in Abuja FCT consumes 4kW/h of electricity for 8 hours daily in June 2017 but is billed based on R2 like most residential customers. Commercial losses to ABUJA DISCO for June 2017 is: Billing based on R2 Customer Classification: 30 days * 8 hours * N24.30/kWh * 4kWh = N23,328/Month Billing based on C3 Customer Classification: 30 days * 8 hours * N47.09/kWh * 4kWh = N45,206.4/Month Therefore, commercial loss to ABUJA DISCO is N45,206.4 – N23,328 = N21,878/Month. The scenarios above show the monetary enumerations lost by the DisCos on a monthly basis as a function of incorrect electricity customer billing categories. To reduce the liquidity challenges encumbering the DisCos, this issue needs to be looked into and proper actions taken to reduce these commercial losses which are subsequently passed on to the residential electricity consumers. 1.3 RECOMMENDATIONS It is therefore recommended that the DisCos should: 1. Inspect and conduct energy audits for electricity customers under their jurisdiction to ensure proper customers classification. 2. Ensure customers use their buildings for the ab initio stated purposes and sanction those who default. 3. DisCo metering officials should be given incentives to reduce improper customer billing methodologies and corrupt practices. They should also be trained and re-trained on proper customer categorization. 4. Regularly monitor their electricity customers. 5. Reconcile their records and claw back lost funds from erring maximum demand, industrial and commercial customers. 6. Come up with an Energy Theft Whistle-blower policy.