Nigeria’s electricity distribution companies (DisCos) have rejected a new regulatory directive issued by the Nigerian Electricity Regulatory Commission (NERC), describing it as an unprecedented intrusion into the internal administration of privately owned utilities and warning that it could undermine investor confidence in the country’s power sector.

The opposition follows the implementation of Order No. NERC/2026/062, which took effect on July 1, 2026, requiring DisCos to establish dedicated Capital Expenditure (CapEx) Provision Accounts into which a significant portion of their residual revenues must be paid after settling upstream market obligations and administrative operating expenses.

While NERC said the measure is intended to strengthen investment in distribution infrastructure, improve service delivery and promote financial discipline, the DisCos insist it effectively hands the regulator control over how they deploy their earnings.

How the new revenue allocation formula works

Under the new framework, DisCos without outstanding market debts are required to remit 70 percent

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