The House of Representatives’ Ad Hoc Committee investigating reforms and expenditures in Nigeria’s power sector from 2007 to 2024 has accused electricity distribution companies (DisCos) of crippling the national electricity system through years of underinvestment, stalled network expansion, and failure to deliver on commitments made during the 2013 privatisation.
Speaking at a public hearing on Wednesday, the Committee Chairman, Ibrahim Almustapha Aliyu, said many DisCos misled the Federal Government with “lofty and impressive” business plans but failed to deploy the capital required to upgrade substations, transformers, and distribution lines more than a decade after taking over the assets.
Aliyu expressed shock that although the Transmission Company of Nigeria (TCN) claims it can wheel up to 8,000 megawatts, the DisCos can only take about 4,000 megawatts due to infrastructure deficiencies—deficiencies he said were created by their refusal to expand their networks.
“You have refused to invest, refused to expand, and even refused franchising options,” he said. “You are responsible for this situation because you failed to build on what you inherited.”
The chairman noted that if the DisCos had made the necessary capital investments over the past 13–14 years, they would have been able to accept more power, reduce costs, and improve customer satisfaction. Instead, he said, their failure has contributed to widespread electricity theft, meter bypassing, and growing consumer anger.
“How can someone continue paying when their bill matches their salary?” he asked. “People will naturally seek alternatives. Your refusal to invest is a major reason for the rising cases of bypassing and stealing electricity.”
Aliyu also reminded the companies that many Nigerians enjoyed more reliable power under the defunct NEPA and expected improved service delivery under private-sector control. He challenged the DisCos to explain why the financial strength and technical competence they presented during privatisation now contradict their inability to meet tariff obligations, expand their networks, or deliver promised service improvements.
Responding, Dr. Mahmood Abubakar, Chief Regulatory and Compliance Officer of Kaduna Electric, said the DisCos were constrained by an unsustainable tariff system. According to him, about 60 percent of electricity supplied nationwide is subsidised, a situation that discourages investment and undermines the financial viability of the distribution companies.
He explained that only about 40 percent of electricity consumed by Band A customers is priced at cost-reflective levels, while the rest depends heavily on government subsidies that are often delayed or not fully paid.
Abubakar warned that the current structure distorts billing, weakens revenue collection, and limits the ability of DisCos to secure the loans required for capital projects. In some Band A feeders, he said, energy losses reach 80 percent due to theft and meter bypassing, making full revenue recovery “impossible.”
He added that subsidy delays disrupt the entire electricity value chain, particularly the ability of generation companies to pay for gas.
“The subsidy does not arrive when it is due it is paid only at the government’s discretion,” he said. “We cannot settle our market invoices, the generation companies cannot meet firm obligations to gas suppliers, and the entire chain is weakened.”
