The House of Representatives Committee on Power has demanded indebted Electricity Distribution Companies (DisCos) to urgently settle their outstanding financial obligations to the Nigerian electricity market.
Key Highlights
- House Committee on Power urges indebted DisCos to clear outstanding market debts.
- Lawmakers warn that unpaid obligations could undermine electricity market stability.
- IBEDC faced a public hearing over its outstanding financial obligations.
- DisCos with outstanding obligations include Benin, Enugu, Ibadan, Jos, Kaduna, Port Harcourt and Kano.
- NISO says stronger market liquidity is critical to improving electricity supply and service delivery.
The committee made the call during an oversight visit to the headquarters of the Nigerian Independent System Operator (NISO) in Abuja. NISO disclosed this in a statement released on Thursday.
The committee’s Chairman, Rep. Victor Nwokolo, reportedly expressed concern over the mounting debts owed by some DisCos, warning that poor liquidity could undermine the stability and sustainability of the electricity market.
The lawmakers also witnessed a public hearing on the outstanding market obligations of the Ibadan Electricity Distribution Company (IBEDC).
The hearing, chaired by NISO Executive Director, Market Operations, Edmond Eje, formed part of the operator’s engagements with selected DisCos over outstanding obligations, events of default and other compliance issues in the Nigerian Electricity Market.
Rep. Nwokolo called on IBEDC and other indebted DisCos to make concerted efforts to clear their debts and comply with the rules governing the electricity market.
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The DisCos identified as having outstanding market obligations are Benin, Enugu, Ibadan, Jos, Kaduna, Port Harcourt and Kano.
According to NISO, the oversight visit provides the lawmakers with firsthand knowledge of the organisation’s operations, statutory responsibilities and challenges affecting the effective functioning of the electricity market.
Welcoming the committee, NISO Managing Director, Abdu Mohammed, commended the lawmakers for their oversight activities and support for reforms in the power sector.
Mohammed said the establishment of NISO was one of the major outcomes of reforms introduced under the Electricity Act, 2023.
He explained that the Act provided the framework for the unbundling of the Transmission Company of Nigeria (TCN) and the establishment of an independent system operator.
The NISO chief executive also briefed the lawmakers on the organisation’s development, statutory mandate and five-year development plan designed to strengthen system operations, improve electricity market management and enhance system planning.
He said the plan would also facilitate better coordination of Nigeria’s power system.
Mohammed stressed the need for stronger collaboration among the National Assembly, NISO and other stakeholders to address the structural and financial challenges confronting the sector.
He welcomed the committee’s attention to market defaults by DisCos, noting that improved liquidity was crucial for market participants to meet their financial obligations and sustain operations.
According to him, a more liquid electricity market would ultimately translate into improved service delivery to consumers.
Mohammed appealed to the National Assembly to sustain its support and constructive oversight, saying continued collaboration among stakeholders was critical to strengthening the electricity market.
He added that such collaboration would help stabilise the national grid and support efforts to achieve a more reliable and sustainable electricity supply across Nigeria.
