The Nigerian Independent System Operator (NISO) has rejected the debt payment proposals submitted by some electricity distribution companies (DisCos) on their outstanding debt to the Nigerian Electricity Market and service providers.
In a statement issued by the NISO management on Sunday after a four-day public hearing of its committee with the DisCos to review their outstanding obligations and assess their proposed arrangements for settling their outstanding market debts, the committee found some of the payment proposals by the distribution companies as unacceptable, particularly in view of the size and the long time the debt had been owed by them.
According to NISO, the five-member committee, which was chaired by NISO’s Executive Director, Market Operations, Edmund Eje, also raised concerns about the adequacy of the proposed payment frameworks, noting that they do not clearly address the DisCos’ outstanding market obligations.
NISO stated that the Federal Government had already paid about 97% of the DisCos’ outstanding obligations incurred between 2015 and 2020, adding that the committee stressed the need for the affected DisCos to take immediate steps to settle their remaining balances.
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It warned that it could move to the next stage of the process, including sanctioning of the defaulting DisCos as provided under the Market Rules.
While restating its commitment to constructive engagement, transparency and due process in resolving the outstanding obligations, the market operator maintained that committee’s engagement with the DisCos highlighted growing concerns over market discipline and the failure of some participants to fulfil their financial obligations.
The NISO clarified: “This is a situation that has continued to affect service providers and the sustainability of the power sector.”
It would be recalled that the Nigerian Electricity Regulatory Commission (NERC) had about a fortnight ago dissolve the Kaduna Electricity Distribution Company’s (KAEDC’s) board over a debt crisis involving about N456.5 billion cumulative debt and other operational challenges. The regulatory commission constituted an interim board to oversee the DisCos’ operations until another board would be constituted to fully oversee the operations of the company.
Despite improving their revenue collection efficiency rate over the regulatory oversight of the NERC to 82.03 percent in Q4 2025, the DisCos then still recorded N174.12 billion billing shortfalls at the end of the year. .
