The House of Representatives Committee on Power has called on electricity distribution companies (DisCos) with unpaid market obligations to urgently settle their debts, warning that persistent financial defaults could undermine the stability of Nigeria’s electricity market.
The committee, chaired by Onyemaechi Nwokolo, made the call during an ongoing engagement on outstanding financial obligations in the Nigerian Electricity Supply Industry.
The committee observed a public hearing concerning the outstanding market obligations of the Ibadan Electricity Distribution Company (IBEDC).
The hearing, chaired by the Executive Director of Market Operations at the Nigerian Independent System Operator (NISO), Edmond Eje, was part of ongoing engagements with selected DisCos over unpaid obligations, Events of Default and other compliance issues within the electricity market.
Nwokolo expressed concern over the growing accumulation of debts by some distribution companies and urged the affected firms to take immediate steps to meet their financial responsibilities.
According to him, stronger liquidity is necessary for the effective functioning and long-term sustainability of the electricity market.
He specifically appealed to IBEDC and other indebted DisCos to utilise available resources to clear their outstanding obligations and comply fully with the rules governing the electricity market.
The committee chairman warned that continued failure to meet financial obligations could negatively affect market liquidity and ultimately weaken the sustainability of the power sector.
After the public hearing, members of the committee proceeded to NISO’s office for a scheduled oversight engagement with the system operator’s management.
Welcoming the lawmakers, NISO Managing Director and Chief Executive Officer, Engr. Abdu Mohammed, commended the committee for its oversight activities and continued support for reforms in the electricity industry.
Mohammed described the creation of NISO as one of the significant outcomes of the reforms introduced through the Electricity Act, 2023.
The legislation provided the framework for unbundling the Transmission Company of Nigeria and establishing an independent System Operator responsible for key aspects of electricity system and market operations.
He also briefed the committee on NISO’s development since its establishment, its statutory responsibilities and its five-year development plan.
According to him, the plan is focused on improving system operations, strengthening electricity market management, enhancing system planning and ensuring more effective coordination of Nigeria’s power system.
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Mohammed stressed the need for continued cooperation between the National Assembly, NISO and other stakeholders within the Nigerian Electricity Supply Industry to tackle the financial and structural problems affecting the sector.
He welcomed the lawmakers’ intervention on market defaults by DisCos, noting that improved liquidity would enhance the ability of market participants to fulfil their obligations and maintain stable operations.
The NISO chief executive said a healthier financial position across the electricity market would also support improved service delivery to consumers.
He appealed to the National Assembly to sustain constructive oversight and institutional support for reforms in the sector.
Mohammed maintained that continued collaboration among relevant institutions would be crucial to strengthening the electricity market, stabilising the national grid and advancing efforts to provide Nigerians with a more reliable and sustainable electricity supply.