The Nigerian Independent System Operator (NISO) has rejected payment proposals submitted by some electricity distribution companies (DisCos) to settle their outstanding obligations to the Nigerian Electricity Market and service providers.
NISO disclosed this in a statement issued by its management in Abuja on Sunday, following a four-day public hearing with the DisCos on their outstanding market debts.
The hearing, which held from September 1 to September 4, was convened to review the outstanding obligations of electricity distribution companies and assess their proposed arrangements for settling the balances.
The five-member committee overseeing the process was chaired by NISO’s Executive Director, Market Operations, Edmund Eje.
According to NISO, the committee found some of the payment proposals unacceptable, particularly in view of the size and age of the outstanding debts.
However, NISO said it remained committed to constructive engagement, transparency and due process in resolving the outstanding obligations.
The system operator said the four day hearing provided an opportunity to examine the financial obligations of the DisCos and review proposals aimed at liquidating debts that have continued to affect the effective functioning and development of the Nigerian Electricity Market.
NISO said the hearing also highlighted growing concerns over market discipline and the failure of some market participants to meet their financial obligations.
The issue of debt in the power sector has been a major concern for both the regulator and the operator. While NISO is battling with the DisCos’ obligations on one hand, the DisCo’s are also struggling with government agencies not paying their bills.
Meanwhile, The Nigerian Electricity Regulatory Commission (NERC) recently took control of Kaduna Electricity Distribution Company (KAEDC) and dissolved its board over a debt crisis involving about N456.5 billion in cumulative market obligations.
Nairametrics previously reported that electricity distribution companies recorded an aggregate billing efficiency of 82.03% in the fourth quarter of 2025, despite posting N174.12 billion in billing shortfalls.
Collection efficiency measures the proportion of electricity bills successfully recovered by DisCos from customers.
Lower collection efficiency affects cash flows across the electricity value chain, reducing payments to generation companies (GenCos), the Transmission Company of Nigeria (TCN) and gas suppliers.
