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, warning that sanctions may follow.
NISO announced the decision in a statement issued by its management in Abuja on Sunday, following a four-day public hearing with the affected DisCos on their unpaid market obligations.
The hearing, which held from September 1 to 4, was convened to review the outstanding debts of the distribution companies and examine their proposed arrangements for clearing the balances.
A five-member committee chaired by NISO’s Executive Director, Market Operations, Mr Edmund Eje, conducted the hearing.
NISO said the payment plans presented by some of the DisCos were considered unacceptable, particularly because of the size and age of their outstanding debts. The committee also expressed concern that the proposed frameworks were inadequate to address the financial obligations owed by the companies.
According to NISO, the Federal Government has already netted off about 97 per cent of the DisCos’ outstanding obligations incurred between 2015 and 2020.
With only a fraction of those obligations remaining, the system operator said the affected DisCos must take immediate steps to clear their outstanding balances.
NISO said it would now proceed to the next stage of the process, including the possible application of sanctions provided under the Market Rules.
The system operator, however, said it remained open to constructive engagement with the DisCos and would continue to follow the principles of transparency and due process in resolving the outstanding obligations.
NISO said the hearing also highlighted growing concerns over market discipline and the failure of some participants in the Nigerian Electricity Market to meet their financial obligations.
It warned that the situation was putting pressure on service providers and affecting the sustainability and effective functioning of the power sector.
The system operator stressed that stronger compliance and accountability among market participants were essential to restoring confidence in the electricity market and ensuring the sustainable development of Nigeria’s power sector.
