By Mohammed Aliyu
The recent coverage of Order No. NERC/2026/062 has centred almost entirely on the strongest voices in the room — DisCo executives warning of investor fallout and describing the directive as regulatory overreach into corporate governance.
That framing, while consistent across recent reports, risks flattening a more complicated reality: the DisCos are not a single bloc, and not all of them share the confrontational posture attributed to “the DisCos” as a class.
One notable feature of the coverage so far is how heavily it leans on unnamed sources — “one utility executive,” “a northern-based electricity distributor,” “another utility executive” — while no DisCo has put its name to the rejection on record.
That pattern is worth scrutiny on its own terms.
Anonymous sourcing is not unusual in sensitive regulatory disputes, but when an entire narrative of “industry rejection” rests on unnamed voices, it’s fair to ask how representative that narrative actually is, and whether it reflects a genuine sector-wide consensus or the loudest, best-resourced objectors dominating the microphone.
A more accurate picture is emerging of a divided industry response.
The majority of DisCos, by most indications, appear willing to engage NERC directly on implementation mechanics rather than contest the order’s legitimacy outright.
Their position is less “this order is unlawful and must be withdrawn” and more “we have concerns about the timelines, thresholds, and approval bottlenecks, and we’d rather resolve those at the table than in a legal or public fight.”
The rejectionist position, by contrast, appears concentrated among a smaller number of operators — plausibly those with the strongest balance sheets and the least urgent liquidity pressure forcing their hand, and therefore the most to lose from a 70/30 revenue split that constrains discretionary control over surplus cash.
This distinction matters:
- It affects how the sector’s response should be read by regulators and investors. A narrative of unified rejection suggests a hardening standoff. A narrative of a vocal minority versus an engaging majority suggests room for NERC to adjust implementation details — phasing, approval turnaround times, PIP eligibility criteria — without a wholesale climbdown.
- It reflects real differences in DisCo financial positions. DisCos with outstanding market debts face a harsher allocation (15% retained) than debt-free DisCos (30% retained). It stands to reason that DisCos under acute liquidity strain have more incentive to negotiate a workable framework than those with the balance-sheet cushion to fight the order outright.
- It matters for the credibility of the industry’s legal and policy arguments. If the objection is genuinely about process — inadequate consultation, fair hearing concerns — rather than a blanket rejection of NERC’s authority to direct capital investment, a negotiated resolution is both more realistic and more constructive than protracted litigation or a media campaign built on anonymous quotes.
NERC’s own defence of the order — targeting chronic underinvestment and complementing DISREP and PMI interventions — suggests the commission would likely be receptive to DisCos who choose engagement over confrontation.
The DisCos willing to sit down with NERC to resolve implementation concerns may ultimately shape a more durable outcome than those pursuing rejection through an anonymous, one-sided media narrative.
These are companies operating in one of the most difficult utility environments in the world: tariffs that remain some distance from cost-reflective, chronic collection shortfalls, and a market structure that has left many DisCos financially fragile through no fault of their current management.
When a regulator locks up 70–85% of residual revenue into a controlled account, the concern that this could strip away exactly the flexibility a distressed utility needs to survive an operational emergency isn’t posturing — it’s a legitimate operational risk.
NERC’s underlying goal is not in question. Nigerians have waited too long for the network investment that chronic underinvestment has denied them, and a regulator watching earned revenue sit uncommitted while consumers endure poor service has real grounds for wanting stronger assurance that money translates into infrastructure.
But there is a meaningful difference between setting investment targets and enforcing them — which NERC already has ample power to do through licence conditions, Performance Improvement Plans, and sanctions — and directing exactly how a private company must warehouse and disburse its own earned revenue.
The latter edges into governance territory that, under Nigerian company law, sits with boards and shareholders, not regulators.
DisCos raising that distinction are not being obstructive; they’re defending a principle that matters for every regulated industry, not just power.
There’s also a practical concern NERC should weigh carefully: DisCos have struggled for years to attract the private financing the sector needs precisely because investors see governance and cash-flow unpredictability as a red flag.
An order that constrains a board’s control over its own balance sheet, however well-intentioned, could make that financing gap harder to close, not easier — undermining the very investment NERC is trying to accelerate.
None of this means the order should simply be resisted or waited out. DisCos have an opportunity here to lead with data rather than objection: to show NERC, transparently, what operational reserve they actually need to manage emergencies and service obligations safely, and to propose an alternative structure — a lower initial threshold, a phased ramp tied to demonstrated investment performance, or an independently administered escrow that gives NERC real assurance without functioning as day-to-day financial controllership.
That’s a stronger position than public resistance, and it’s one regulators are generally receptive to when it’s backed by evidence rather than sentiment.
Nigeria’s power sector doesn’t need another prolonged standoff between operators and regulator; it has had enough of those, and it’s consumers who pay the price in delayed investment either way.
NERC has shown it’s willing to act decisively when it sees resources sitting idle.
DisCos now have a chance to show they can meet that seriousness with their own transparent case for a workable framework — one that gets the network investment NERC wants, without hollowing out the operational resilience the companies need to deliver it.
