Electricity: NERC clamps down on DisCos, orders revenue diversion to network upgrades
The Nigerian Electricity Regulatory Commission, NERC, has issued a revised order directing electricity Distribution Companies, DisCos, to dedicate a portion of their earned operating revenue to critical network improvement projects. The Commission said the directive was aimed at accelerating network upgrades, improving electricity supply reliability and ensuring that available revenues were…
The Nigerian Electricity Regulatory Commission, NERC, has implemented a new directive targeting electricity Distribution Companies, known as DisCos. The order, effective from September 4, 2026, mandates that a portion of the DisCos' operating revenue be allocated to network improvement projects. This move aims to enhance the reliability of electricity supply, accelerate upgrades to the network, and ensure that revenues are invested in essential infrastructure.
The regulation, announced on September 4, stems from a review of DisCos' revenue utilization during the 2025 market cycle.
Under the new directive, DisCos must establish dedicated Capital Expenditure Provision Accounts to finance approved network enhancement initiatives. The precise amount to be set aside hinges on each distribution company's debt profile. Debt-free DisCos are required to contribute half of their earnings from Non-Administrative Operating Expenditure (Non-Admin OpEx) to these accounts starting August 2026, with this contribution rising to 60% from February 2027.
Furthermore, NERC has mandated that all projects funded through these accounts must receive approval from the Commission and be reported quarterly. DisCos with outstanding debts to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator are also required to complete their debt reconciliation and submit approved repayment plans within 180 days.
The primary objective of this revised Order is to bolster the electricity distribution infrastructure, improve service delivery, and promote financial discipline within the power sector. NERC remains hopeful that this policy will ensure that the revenues generated by DisCos are directed towards addressing critical infrastructure gaps and improving the quality of electricity supply across the nation.
Written by urgent.news from Daily Post Nigeria's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
