NISO threatens sanctions as DisCos fail to clear energy market debts

The Nigeria Independent System Operator (NISO) has rejected payment proposals submitted by Electricity Distribution Companies (DisCos) to liquidate their long-standing debts to the electricity market, signaling potential enforcement of regulatory sanctions. The decision followed a four-day public hearing that concluded on September 4, 2026, aimed at resolving chronic liquidity issues that continue to undermine the Nigerian Electricity Supply Industry (NESI). Read also: Nigeria's power subsidy hits N1.93tn as DisCos lose 37% electricity value The hearing, conducted by a five-member committee chaired by Edmund Eje, Executive Director, Market Operations, expressed concern over the proposed payment frameworks presented by some DisCos for the liquidation of their outstanding market obligations. The Committee noted that the Federal Government had magnanimously netted off approximately 97 per cent of the DisCos' outstanding obligations for the period 2015–2020, and consequently stressed the need for the affected DisCos to take immediate steps towards liquidating their remaining balances. 'The Nigeria Independent System Operator (NISO) has concluded a significant public hearing with the Nigerian Electricity Distribution Companies (DisCos) on their outstanding obligations to the Nigerian Electricity Market and service providers. Related News Read also: States move to reclaim DisCo shares from FG 'The engagement, which began on Tuesday, 1st and ended 4th September 2026, provided an opportunity for NISO to review the outstanding market obligations of the DisCos and examine payment arrangements aimed at addressing balances that have continued to impede the effective functioning and development of the Nigerian Electricity Market. 'Following extensive deliberations, the payment proposals presented by some of the DisCos were considered unacceptable to NISO at the hearing, particularly in view of the magnitude and age of the outstanding obligations. 'NISO will therefore proceed with the next steps, including the application of applicable sanctions as provided under the Market Rules, while maintaining its commitment to constructive engagement, transparency and due process,' the opratir said in a statement issued to jourbalusts. The NISO also stressed the importance of market discipline, compliance and accountability among market participants, as well as continued collaboration in strengthening market confidence and ensuring the sustainability and effective functioning of the Nigerian electricity market. Join BusinessDay whatsapp Channel, to stay up to date Open In Whatsapp