Key Points
- NISO has rejected payment proposals submitted by some DisCos to settle outstanding obligations to the Nigerian Electricity Market and service providers.
- The system operator said the proposals were inadequate given the size and age of the outstanding debts.
- NISO warned that sanctions under the Market Rules could follow if affected DisCos fail to clear their remaining obligations.
Main Story
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 said the proposals were unacceptable, particularly because of the magnitude and age of the debts, following a four-day public hearing with the affected DisCos in Abuja.
The hearing, held from Sept. 1 to Sept. 4, was convened to review the outstanding market obligations of the distribution companies and assess their proposed arrangements for liquidating the balances.
A five-member committee chaired by NISO Executive Director, Market Operations, Mr Edmund Eje, conducted the hearing.
According to the system operator, the committee also found the payment frameworks proposed by some DisCos inadequate to address their outstanding market obligations.
NISO said the Federal Government had already netted off about 97 per cent of DisCos’ outstanding obligations incurred between 2015 and 2020.
It said the committee therefore stressed the need for affected companies to take immediate steps to clear their remaining balances.
The system operator said the outstanding debts had continued to affect service providers and the sustainability and development of the Nigerian Electricity Market.
The Issues
Outstanding market obligations remain a challenge to the financial sustainability of Nigeria’s electricity market, affecting service providers and market discipline. NISO’s rejection of the proposed payment frameworks indicates that it considers the remaining liabilities significant enough to require stronger and more immediate settlement arrangements.
What’s Being Said
NISO said the hearing highlighted growing concerns about market discipline and the failure of some participants to meet their financial obligations.
The system operator said “stronger compliance and accountability among market participants” were critical to restoring confidence and ensuring the effective and sustainable operation of the electricity market.
What’s Next
NISO said it would proceed to the next stage of the process, including the application of sanctions provided under the Market Rules.
The system operator, however, said it remained committed to constructive engagement, transparency and due process in resolving the outstanding obligations.
The Bottom Line: NISO has rejected some DisCos’ proposals for settling outstanding market debts and is preparing to apply available sanctions if affected companies fail to meet their obligations.
 has rejected payment proposals submitted by some electricity distribution ...){kind=link}