Despite DisCos’ protests, NERC presses ahead with new operating-spending order

Nigeria’s electricity regulator is moving ahead with rules that will limit how much surplus operating revenue power distributors can use at their own discretion, despite protests from the companies affected.

Under the revised framework, debt-free distribution companies will retain 50 percent of their earned non-administrative operating expenditure for operational needs from August 2026 through January 2027. They must transfer the remaining half into dedicated capital expenditure provision accounts.

From February 2027, the operational share will fall to 40 percent. The remaining 60 percent must go into capital accounts for approved investments. The revised Order No. NERC/2026/062A, dated September 4, replaces an earlier order issued on June 30. NERC Chairman Musiliu Oseni and Vice Chairman Yusuf Ali signed the document seen by THISDAY.

The revised order offers some immediate relief compared with the original framework, but keeps NERC’s central requirement that a large share of revenue earned above administrative operating costs and current upstream market obligations be ring-fenced for capital investment. Several DisCos have objected, arguing that the commission is moving beyond regulating performance and service standards and is beginning to manage privately owned companies’ finances and operations.

NERC said the framework will ensure that available resources are used prudently to improve and expand electricity distribution infrastructure. It linked the policy to stronger financial discipline and approved Performance Improvement Plans. The commission also said the intervention would speed up feeder rehabilitation, reinforce distribution networks and complement existing measures in the sector.