FG Warns Discos

The Federal Government has urged electricity distribution companies, popularly known as Discos, to strengthen their relationship with state electricity regulators and treat them with the respect they deserve. The warning, delivered by the Vice Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Musiliu Oseni, comes at a time of increasing tension between power distributors and state authorities over tariff-setting powers.

Speaking at NERC’s quarterly stakeholders’ meeting, which concluded in Lagos on Tuesday, Oseni stressed that mutual respect and collaboration were essential to building a fair, transparent, and sustainable electricity market in Nigeria.

“Discos must do better with state regulators—first impressions last. Be open about your challenges so they can work with you. Above all, treat state regulators with the respect they deserve. A timely reminder that collaboration is essential to building a fair, resilient, and sustainable electricity market for Nigeria,” Oseni said.

For months, electricity distribution companies have locked horns with state regulators over tariff-setting. This standoff has created confusion within the Nigerian Electricity Supply Industry (NESI), as both sides claim authority to determine electricity pricing.

The controversy stems from the Electricity Act 2023 (Amended), which decentralised power regulation and gave state governments the right to manage their own electricity markets. Energy commissioners, under the Forum of Commissioners for Power and Energy in Nigeria, have insisted that the Act empowers them to oversee not just the supply of power but also the tariffs within their states.

However, Discos, operating under the Association of Nigerian Electricity Distributors (ANED), argue that while the law allows states to regulate electricity markets within their borders, they cannot set tariffs for cross-border electricity transactions. According to them, such pricing must remain under federal jurisdiction to prevent conflicts and ensure consistency across the grid.

This legal and regulatory deadlock has intensified as some states, beginning with Enugu, move to design tariffs for their electricity markets. The Discos have rejected this approach, warning that it will disrupt market operations and create uncertainty for investors.

Faced with the escalating standoff, NERC summoned stakeholders—including state regulators, Discos, and other sector participants—to a two-day meeting in Lagos. The aim was to tackle the challenges of transitioning into a more decentralised electricity market while safeguarding consumer interests and investor confidence.

The sessions on Monday and Tuesday featured discussions on pressing technical and operational issues. Key among them was the integration of generation plants into the Supervisory Control and Data Acquisition (SCADA) system, a digital platform that monitors and manages electricity networks. Stakeholders also reviewed preparations for Nigeria’s planned synchronisation with the West African Power Pool (WAPP), a regional initiative that aims to connect power systems across West Africa to improve supply reliability.

According to NERC, trial synchronisation tests will be carried out to identify and correct any imperfections before full integration with the WAPP, which is scheduled for completion by June 2026.

“The discussions focused on the SCADA system and synchronisation with the West African Power Pool, covering timelines and GenCo compliance. The commission directed NISO to conduct a synchronisation trial to address any imperfections ahead of full WAPP integration,” NERC said in a social media update.

The regulator reaffirmed its commitment to working closely with stakeholders to strengthen collaboration, ensure transparency, and deliver a long-term sustainable future for Nigeria’s electricity market.

While Oseni cautioned Discos to treat state regulators with respect, he also reminded state authorities of their responsibilities. He advised them to focus on advancing their electricity markets rather than depending heavily on federal subsidies to sustain operations.

According to him, only through innovation, transparency, and financial discipline can states build robust power markets capable of meeting the needs of their citizens.

Beyond regulatory disputes, stakeholders at the meeting also engaged with broader policy changes shaping the future of Nigeria’s electricity market. The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, delivered a presentation on how new tax laws would affect players in the NESI.

Oyedele explained that the reforms are designed to make the sector more transparent, efficient, and investor-friendly. He highlighted the introduction of tax breaks and clearer compliance requirements, which he said could ease the financial burden on sector players while improving overall revenue management.

“We want the sector to be able to thrive because your success is our success,” Oyedele told stakeholders. His comments provided assurance that the government’s fiscal reforms are aligned with efforts to stabilise and grow the power sector.

Nigeria’s electricity industry is undergoing one of the most significant transitions in its history. The decentralisation brought by the Electricity Act 2023 has empowered states, but it has also created friction with existing players like the Discos. At the same time, the sector is grappling with technical demands such as integrating new generation plants into the national grid, modernising infrastructure with SCADA, and aligning with regional initiatives like the WAPP.

Experts note that if managed properly, these reforms could lead to a more competitive and efficient power market. However, failure to resolve disputes between state regulators and Discos could deepen uncertainty, discourage investment, and prolong the electricity crisis that Nigerians have endured for decades.

The Federal Government, through NERC, is therefore pushing for dialogue, collaboration, and mutual respect among all stakeholders. The message is clear: while states and Discos may have different interpretations of the law, Nigeria’s power sector can only thrive if the players work together to prioritise the interests of consumers and the stability of the electricity market.

For millions of Nigerians who struggle daily with unreliable electricity supply and frequent tariff changes, the stakes could not be higher. Whether through improved regulation, modern technology, or fiscal reforms, the success of these efforts will ultimately be judged by their ability to deliver steady, affordable, and fair power to homes and businesses across the country.