George Etomi addresses Discos and NERC relationship in in Nigeria’s power sector

The Nigerian Electricity Regulatory Commission (NERC) has set new remittance expectations for the Discos, requiring an estimated N8.7 billion annually. George Etomi, the Director of Eko Electricity Distribution Company, sheds light on the challenges faced by the Discos in meeting these new requirements. In a recent interview on CNBC Africa, Etomi discussed the intricacies of the power sector in Nigeria and the implications of the latest tariff reviews set to take effect in the first quarter of the upcoming year. The Discos are under pressure to increase their remittances to key market participants, including the government's bulk trader and the market operator. However, the immediate implementation of these new remittance levels has raised concerns among the Discos, as they lack the necessary funds to meet the increased demands. Etomi highlighted the potential risk of shortfalls reemerging if the timing of remittances does not align with the market reset. Despite the challenges, there is hope for the industry as discussions around a willing seller, willing buyer model have begun. This model aims to cater to premium consumers willing to pay cost-reflective tariffs, signaling a potential shift towards a more balanced and competitive market. Etomi emphasized the importance of achieving a cost-reflective tariff to attract investments and promote competition in the sector. He noted that addressing the liquidity issues within the sector is crucial to ensure a consistent power supply and reduce reliance on alternative sources of energy. The interview underscored the need for a regulated yet market-driven approach to transform Nigeria's power sector into a sustainable and efficient system. Etomi called for a continued dialogue and collaboration between the Discos, NERC, and other stakeholders to address the sector's longstanding challenges and unlock its full potential.