By Mary Izuaka

 

The House of Representatives Committee on Power has urged seven electricity Distribution Companies (DisCos) to urgently clear outstanding debts owed to market operators, warning that prolonged defaults threaten liquidity and the sustainability of Nigeria’s power sector.

The Committee, led by its Chairman Victor Nwokolo, made the call last week, during an oversight visit to the headquarters of the Nigerian Independent System Operator (NISO) in Abuja.

During the visit, Committee members attended a public hearing NISO was conducting on the market obligations of the Ibadan Electricity Distribution Company (IBEDC).

The hearing, chaired by NISO’s Executive Director, Market Operations, Edmond Eje, formed part of the company’s ongoing engagements with selected DisCos over outstanding market obligations, events of default and other compliance matters under the Nigerian Electricity Market.

DisCos named over market debts

Addressing participants at the hearing, Mr Nwokolo charged electricity distribution companies with outstanding market obligations to take urgent steps to clear their debts.

He stressed that improved liquidity is critical to strengthening the electricity market and ensuring the power sector’s sustainability.

According to NISO, the affected DisCos are Benin Electricity Distribution Company (BEDC), Enugu Electricity Distribution Company (EEDC), Ibadan Electricity Distribution Company (IBEDC), and Jos Electricity Distribution Company (JEDC).

Others include: Kaduna Electricity Distribution Company (KAEDCO), Port Harcourt Electricity Distribution Company (PHEDC) and Kano Electricity Distribution Company (KEDCO).

Mr Nwokolo expressed concern over the accumulation of market debts by the affected DisCos, noting that prolonged failure to meet financial obligations could adversely affect the liquidity and sustainability of the electricity market.

He called on IBEDC and other indebted DisCos to make every effort within their capacity to settle their outstanding obligations and strengthen compliance with the rules governing the electricity market.

Following the public hearing, the Committee proceeded with its scheduled oversight engagement with NISO management.

Welcoming the lawmakers to the NISO office, the Managing Director/Chief Executive Officer, Abdu Mohammed, commended the Committee for its oversight role and continued support for reforms in Nigeria’s electricity sector.

He noted that the establishment of NISO was a significant outcome of the reforms introduced under the Electricity Act, 2023, which provided the framework for the unbundling of the Transmission Company of Nigeria and the establishment of an independent System Operator.

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Mr Mohammed briefed the Committee on NISO’s journey since its establishment, its mandate and its comprehensive five-year development plan, designed to guide the organisation’s efforts towards strengthening system operations, improving electricity market operations, enhancing system planning and supporting the effective coordination of Nigeria’s power system.

He also highlighted the importance of collaboration between the National Assembly, NISO and other institutions within the Nigerian Electricity Supply Industry in addressing the structural and financial challenges confronting the sector.

While commending the Committee for lending its voice to the issue of market defaults by DisCos, he stressed that improved liquidity across the electricity market would strengthen the capacity of market participants to meet their obligations, sustain operations and ultimately contribute to improved service delivery to electricity consumers.

He appealed for continued support and constructive oversight from the National Assembly.

According to him, sustained collaboration among the various institutions in the sector remains critical to strengthening the electricity market, stabilising the national grid and advancing efforts towards a more reliable and sustainable electricity supply in Nigeria.