The Northern Electricity Supply Company (NESCO) is losing around 392.5 million units of electricity annually. In the 2024–25 fiscal year, the company recorded a system loss of 7.72 percent. Calculated at the wholesale electricity rate of Tk 7.04 per unit set in 2024, the value of the lost electricity amounts to approximately Tk 2.76 billion.

However, the full financial impact of these losses remains unclear, as separate figures for technical and commercial losses are not available in the relevant reports. Meanwhile, despite a decline in system losses over the past seven years, both electricity losses and outstanding bills have consistently remained higher in the Rangpur zone than in Rajshahi.

The findings emerged from an analysis of NESCO’s commercial operations for the 2024–25 fiscal year, comparative data on system losses and revenue collection over seven years, and a feasibility study on relocating the company’s head office.

System loss refers to the portion of electricity received or purchased by a distribution company that does not appear in its recorded electricity sales. Such losses may result from technical problems in distribution lines as well as commercial factors, including metering and billing discrepancies and illegal connections.

According to NESCO’s figures, the company received approximately 5.08 billion units of electricity in the 2024–25 fiscal year, against recorded sales of around 4.69 billion units. As a result, approximately 392.5 million units were accounted for as system losses.

Higher Losses and Outstanding Bills in Rangpur
An analysis of seven years of data from NESCO’s Rajshahi and Rangpur zones shows that system losses in Rangpur were higher than those in Rajshahi in every fiscal year during the period.

In 2018–19, system losses stood at 10.74 percent in Rajshahi and 13.97 percent in Rangpur. During the same year, average outstanding electricity bills in Rajshahi amounted to 2.48 months of billing, compared with 4.75 months in Rangpur.

The trend continued in subsequent years. In 2019–20, system losses were 10 percent in Rajshahi and 12.88 percent in Rangpur. In 2020–21, the rates stood at 9.19 percent and 12.39 percent, respectively. In 2021–22, they fell to 8.23 percent in Rajshahi and 10.44 percent in Rangpur.

In 2022–23, system losses were 7.61 percent in Rajshahi and 9.73 percent in Rangpur. In 2023–24, the figures declined further to 7.32 percent and 9.36 percent, respectively.

In the latest fiscal year, 2024–25, system losses in Rajshahi dropped to 6.99 percent, while Rangpur recorded 8.79 percent.

Over the seven-year period, system losses declined by 3.75 percentage points in Rajshahi and 5.18 percentage points in Rangpur.

Outstanding electricity bills also remained significantly higher in Rangpur. In 2024–25, average arrears in Rajshahi amounted to 1.67 months of billing, compared with 3.51 months in Rangpur.

Feasibility Study Recommends Stronger Oversight
The feasibility study on relocating NESCO’s head office from Rajshahi to Bogura also highlighted the disparities between the two zones.

According to the report, system losses in Rangpur were, on average, 2 to 2.5 percentage points higher than in Rajshahi. Outstanding bills were also approximately two months higher.

The report emphasized the need for closer monitoring of commercial operations in Rangpur. It suggested that establishing NESCO’s head office in Bogura could make supervision of both the Rajshahi and Rangpur regions easier, potentially helping reduce system losses and increase revenue collection.

System Losses Add to Pressure on Electricity Demand

System losses affect more than a distribution company’s financial accounts. Reducing losses would allow more electricity to reach consumers from the same volume of electricity generated or purchased, potentially reducing the need for additional generation.

Shariful Islam, associate professor of economics at Bogura Azizul Haque College, said reducing losses in the distribution system was as important as increasing electricity generation to meet demand.

He noted that lowering system losses would enable more electricity to reach consumers from the same volume of generation, reducing pressure to produce additional power.

What Is the Financial Cost of the Lost Electricity?
According to NESCO, approximately 392.5 million units of electricity were lost through system losses in the 2024–25 fiscal year. However, the relevant report does not provide a separate financial valuation of the lost electricity or a breakdown of technical and commercial losses.

Consequently, the company’s actual financial losses attributable to system losses cannot be directly determined from the available figures.

Several NESCO officials, speaking on condition of anonymity, said that every unit of electricity generated or purchased involves a cost. When electricity fails to reach consumers as saleable units, the company also loses expected revenue.

They said reducing system losses could lower distribution costs while enabling the company to sell more electricity from the same volume of power purchased or generated.

Although NESCO’s seven-year data indicate a steady decline in the system loss rate, the company still recorded substantial losses in the latest fiscal year. Determining the full financial impact and strengthening oversight to reduce commercial losses remain important challenges.

NESCO Managing Director Mashiur Rahman said regular and intensive monitoring had helped keep system losses under control in the Rajshahi region.

He attributed the improvement to field-level supervision of distribution lines and infrastructure, prompt identification and repair of faults, and maintenance of the distribution network. He added that NESCO plans to strengthen similar activities in the Rangpur region.