The Nigerian Independent System Operator, NISO, has rejected payment proposals submitted by some electricity distribution companies, DisCos, for settling their outstanding obligations to the Nigerian Electricity Market and service providers.
This is contained in a statement issued by the management of NISO in Abuja, in which the system operator said the proposals were considered unacceptable, particularly given the magnitude and age of the outstanding debts.
NISO said the decision followed a four-day public hearing with the affected DisCos in Abuja. The hearing, which began on Sept. 1 and ended on Sept. 4, was convened to review the distribution companies’ outstanding market obligations and examine their proposed arrangements for settling the balances.
The proceedings were conducted by a five-member committee chaired by NISO’s Executive Director, Market Operations, Edmund Eje.
The committee expressed concern over the payment frameworks proposed by some DisCos, describing them as inadequate to address their outstanding market obligations.
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According to NISO, the Federal Government had already offset about 97 per cent of the DisCos’ outstanding obligations incurred between 2015 and 2020.
The system operator said the committee therefore stressed the need for the affected distribution companies to take immediate steps to clear their remaining balances.
NISO said it would proceed to the next stage of the process, including the application of sanctions provided under the Market Rules.
The system operator, however, said it remained committed to constructive engagement, transparency and due process in resolving the outstanding obligations.
NISO said the hearing also provided an opportunity to examine proposals from DisCos aimed at liquidating debts that have continued to affect the effective functioning and development of the Nigerian Electricity Market.
It said discussions during the hearing highlighted growing concerns over market discipline and the failure of some participants to meet their financial obligations.
According to the system operator, the situation has continued to affect service providers and the sustainability of the power sector.
NISO stressed that stronger compliance and accountability among market participants were critical to restoring confidence and ensuring the effective and sustainable operation of the Nigerian electricity market.
NAN
