DisCos Oppose NERC's New CapEx Account Mandate

Distribution companies (DisCos) in Nigeria have voiced strong reservations against a new regulatory order issued by the Nigerian Electricity Regulatory Commission (NERC). The order, effective July 1, 2026, mandates that DisCos establish a dedicated capital expenditure (CapEx) provision account, requiring them to allocate a substantial portion of their residual revenue to settle upstream market invoices and operational expenses.

DisCos contend that this directive exceeds NERC's statutory oversight role and constitutes regulatory overreach, undermining their financial viability. The order stipulates that DisCos must remit 70% of their earnings from non-administrative operational expenditures to the CapEx account, retaining only 30% for operational use.

Additionally, the order requires DisCos to reconcile outstanding market debts with NBET within 180 days and obtain NERC's approval for any expenditure from the CapEx account. DisCos argue that this framework could deter investment and lead to increased regulatory control over their financial decisions.