NISO rejects DisCos’ payment plans over outstanding electricity market debts

By Onu Okorie

Nigerian Independent System Operator NISO has rejected payment proposals submitted by some electricity distribution companies DisCos for the settlement of their outstanding obligations to the Nigerian Electricity Market.
NISO said the proposals were considered unacceptable, particularly given the magnitude and age of the debts owed by the affected DisCos to the market and service providers.
The position followed a four-day public hearing organised by NISO to review the outstanding obligations of the distribution companies and examine proposed arrangements for settling the accumulated balances.
The hearing, which commenced on Tuesday, September 1 and ended on Friday, September 4, 2026, was conducted by a five-member committee chaired by the Executive Director, Market Operations, Engr. Dr. Edmund Eje.
The committee expressed concern over payment frameworks presented by some of the DisCos, stressing that the proposals did not adequately address the scale of their outstanding market obligations.
NISO noted that the Federal Government had already taken a major step towards easing the financial burden on DisCos by netting off approximately 97 per cent of their outstanding obligations accumulated between 2015 and 2020.
Against this background, the committee urged the affected distribution companies to take immediate steps to liquidate their remaining liabilities.
The development comes amid continuing efforts to strengthen financial discipline and accountability within Nigeria’s electricity market, where accumulated debts among market participants have remained a major challenge to the sustainability of the sector.
NISO said it would now proceed with the next steps arising from the hearing, including the application of applicable sanctions against defaulting market participants in line with the Market Rules.
The system operator, however, stressed that it remained committed to constructive engagement with the DisCos, as well as transparency and due process in resolving outstanding obligations.
According to NISO, the outcome of the hearing underscores the importance of market discipline, compliance and accountability among electricity market participants.
It added that sustained collaboration among stakeholders was essential to restoring confidence in the electricity market, improving financial discipline and ensuring the effective and sustainable operation of Nigeria’s power sector.
The latest move is expected to put further pressure on indebted DisCos to honour their financial obligations and comply with established market rules as the electricity industry continues its transition towards a more financially sustainable market.