DisCos Under Fire as States Seek Freedom to Buy Electricity Directly

State governments across Nigeria are making a fresh push to secure direct energy supply arrangements with power generation companies (GenCos), in a bid to bypass electricity distribution companies (DisCos) and overcome ongoing challenges in the power sector.

The request, championed by the Forum for Commissioners of Power and Energy in Nigeria (FOCPEN), signals renewed interest in implementing the Eligible Customer Regulation introduced in 2017. This regulation permits qualified end-users to procure electricity directly from GenCos without routing through DisCos.

In a statement issued from Abuja, the forum called for the execution of interim Power Purchase Agreements (PPAs) to enable newly created sub-national electricity companies (SubCos) to negotiate and procure power directly from the national grid. The group also urged the Nigerian Bulk Electricity Trading Company (NBET) to be empowered to facilitate such agreements.

The forum argued that the existing structure, where SubCos are forced to receive electricity through holding companies aligned with DisCos, is anti-competitive and undermines operational autonomy. It warned that this system enables abuse of power by DisCos, which are allegedly leveraging their control to stifle fair access to energy.

FOCPEN further called on the Minister of Power, Chief Adebayo Adelabu, to take decisive action and compel the Nigerian Electricity Regulatory Commission (NERC) and the Enugu Electricity Distribution Company (EEDC) to restore full electricity supply to Enugu State. The call follows EEDC’s decision to reduce power allocation to the state, citing projected losses tied to a tariff adjustment by Main Power Electricity Distribution Ltd, which had lowered the band A electricity tariff from ₦209/kWh to ₦160/kWh.

According to EEDC, the new rate structure would result in a monthly loss of over ₦1 billion, prompting a significant reduction in power supply. FOCPEN described the move as unlawful and detrimental to residents, urging the federal government to prevent what it termed as the “arbitrary deprivation” of electricity by DisCos.

The commissioners emphasized that NERC must urgently develop a regulatory framework to support bilateral power contracts between SubCos and GenCos, especially within State Electricity Markets (SEMs). They insisted that unless these reforms are implemented, the current crisis in Enugu and other states could set a dangerous precedent for electricity access and governance across the country.