Revised Order on Utilisation of Earned Non-Admin Operating Expenditure by Distribution Companies

The Nigerian Electricity Regulatory Commission (NERC) has issued a revised Order on the utilisation of earned Non-Administrative Operating Expenditure (Non-Admin OpEx) by successor electricity Distribution Companies (DisCos).

This Order is aimed at accelerating network upgrades, improving service reliability, and ensuring that available revenues are invested in critical infrastructure projects.

The Order, which takes effect from September 4, 2026, follows a regulatory review of DisCos' revenue utilisation for the 2025 market cycle.

Key Highlights of the Order are:

• DisCos must establish and maintain dedicated Capital Expenditure (CapEx) Provision Accounts to fund approved network improvement projects.
• A portion of earned Non-Admin OpEx will be earmarked for network rehabilitation, reinforcement, and expansion, based on each DisCo's debt profile.
• Debt-free DisCos are required to remit 50% of earned Non-Admin OpEx to the CapEx account from August 2026, increasing to 60% from February 2027.
• All projects funded through the CapEx Provision Account must receive NERC approval and be reported quarterly.
• DisCos owing NBET and the Market Operator must complete debt reconciliation and submit Commission-approved repayment plans within 180 days.

This Order is designed to strengthen distribution infrastructure, improve service delivery, and enhance financial discipline in the electricity sector.

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