By Adetayo Adegbemle
Newspaper publications alluding that Nigeria’s electricity distribution companies have pushed back hard against NERC’s new CapEx Provision Account order — Order No. NERC/2026/062 — and it’s worth taking that pushback seriously rather than dismissing it as an industry simply resisting oversight.
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.
