Electricity distribution companies have rejected a new directive by the Nigerian Electricity Regulatory Commission requiring them to establish dedicated capital expenditure provision accounts, describing the move as an unprecedented intrusion into the administration of privately owned utilities.
The power firms warned that the order could discourage private investment in Nigeria’s electricity sector by placing regulatory control over how DisCos deploy their revenues.
According to a statement, the opposition followed the implementation of Order No. NERC/2026/062, which took effect on July 1, 2026, and requires DisCos to establish dedicated CapEx provision accounts into which a significant portion of their residual revenues must be paid after settling upstream market obligations and administrative operating expenses.
While NERC said the measure was designed to strengthen investment in distribution infrastructure, improve service delivery and promote financial discipline, the DisCos argued that it effectively hands the regulator control over how they spend their earnings.
Under the order, it was said that DisCos without outstanding market debts are required to remit 70 per cent of their earned non-administrative operating expenditure into the CapEx Provision Account and retain only 30 per cent.
