NERC Tightens DisCos’ Spending Controls Despite Industry Pushback
The Nigerian Electricity Regulatory Commission (NERC) has implemented a new order requiring electricity distribution companies to ring-fence a portion of their revenue for capital investment. Despite pushback from utilities regarding operational autonomy, the regulator insists these measures are necessary for network rehabilitation.
Why it matters
The move highlights the tension between regulatory oversight and the financial management of privatized utility companies in developing markets.
The Nigerian Electricity Regulatory Commission (NERC) has enforced a revised framework that progressively restricts the amount of surplus operational revenue Electricity Distribution Companies (DisCos) can deploy at their discretion, despite strong objections from the utilities.
The commission ordered the 11 DisCos to begin channelling a fixed share of their earned Non-Admin Operating Expenditure (OpEx) into a dedicated account for network expansion and rehabilitation, according to a regulatory Order seen by LEADERSHIP.
Under the new arrangement, debt-free DisCos will retain 50 per cent of their earned non-administrative Operating Expenditure (OpEx) for operational needs between August 2026 and January 2027, with the balance transferred into dedicated Capital Expenditure (CapEx) Provision Accounts.
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