OALP’s Analysis of NERC’s Order on Regulatory Net-offs 2022 and its potential impact on the finances of DisCos and the Nigerian Electricity Supply Industry

On 1 July 2022, the Nigerian Electricity Regulatory Commission (NERC) issued the Order on Regulatory Net-offs 2022 (Net-off Order) for the Nigerian Electricity Supply Industry (NESI). This is NERC’s first Order on “Regulatory Net-Offs”, a concept introduced in the Multi-Year Tariff Order 2022. Under this arrangement, NERC issues specific directives which permit Distribution Companies (DisCos) to recover monies owed them by the market, after meeting payment obligations to the Market Operator (MO) and the Nigerian Bulk Electricity Trading Company (NBET). The Net-off Order considers three specific net-offs- the Transmission Company of Nigeria (TCN) net-off, Ministries Departments & Agencies of Government (MDA) net-off, and Recovery net-off in NESI. In this newsletter, we critically examine each net-off and the impact of these on DisCos’ finances and NESI.


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