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Reps Accuse DisCos Of Underinvestment, Blame Them For Nigeria’s Power Crisis
The House of Representatives’ Ad Hoc Committee examining reforms and expenditures in Nigeria’s power sector from 2007 to 2024 has accused electricity distribution companies (DisCos) of undermining the national power system through chronic underinvestment, stagnated network expansion, and failure to fulfill the commitments made in their original business plans.
During a public hearing on Wednesday, the Committee’s Chairman, Ibrahim Almustapha Aliyu, said many distribution companies misled the government during privatisation, by showcasing impressive business plans yet failing to deploy the funding needed to upgrade substations, transformers, and distribution lines more than a decade after taking control of the assets.
He expressed disbelief that although the Transmission Company of Nigeria (TCN) claims it could transmit up to 8,000 megawatts, the DisCos still accept only around 4,000 megawatts due to infrastructure limitations a problem he said they created.
Aliyu said the firms have “refused to invest, refused to expand, and refused franchising options,” enabling widespread electricity theft, meter bypassing, and rising consumer frustration across the country.
“You are responsible for this situation because you failed to build on what you inherited.”
He explained: “For the past 13 or 14 years, if you had invested properly in substations, modern transformers, and updated network expansion, none of these issues would persist. You would be taking more power, costs would be reduced, and Nigerians would be satisfied.”
He added that many consumers turn to illegal connections because they consistently receive monthly bills for electricity that is either not supplied or severely insufficient.
“How can someone continue paying when their bill matches their salary?
“People will naturally seek other options. And your refusal to invest is a major factor fueling this widespread practice of bypassing and stealing electricity.”
Aliyu also reminded the distribution companies that some Nigerians enjoyed more reliable power under the defunct NEPA and expected far better service after private investors took over the sector.
He challenged the DisCos to explain why the financial strength and technical expertise they claimed during the privatisation process now contrast with their failure to meet tariff requirements, expand networks, and deliver the promised level of service.
Kaduna Electric’s Chief Regulatory and Compliance Officer, Dr. Mahmood Abubakar, said about 60 percent of electricity supplied nationwide was being subsidised, a situation he noted continues to erode investor confidence and limit distribution companies’ ability to make critical capital investments.
He told the committee that only around 40 percent of electricity consumed by Band A customers is priced at cost-reflective levels, while the remainder relies heavily on government subsidies that are often delayed or unpaid.
Abubakar said the current subsidy arrangement distorts billing structures, weakens revenue collection, and suppresses the capacity of DisCos to grow their infrastructure more than ten years after privatisation.
He noted that, “if the multi-year tariff order is applied strictly, roughly 60 percent of the electricity consumed in Nigeria is subsidised by the government.
“Only Band A customers pay cost-reflective tariffs, yet even among them, some feeders experience energy losses as high as 80 percent due to theft and meter bypassing, making adequate revenue recovery impossible.”
He added that because the distribution companies cannot collect their full revenue requirement, they are unable to secure investments or loans needed to upgrade their equipment and networks.
Abubakar also stressed that delays in subsidy payments impact the entire electricity value chain, especially the ability of generating companies to pay for gas, which ultimately affects power generation.
“The subsidy does not arrive when it is due—it is paid only at the government’s discretion,” he said.
“That is the reality, and it affects everyone. We cannot settle our market invoices in full, the generation companies cannot meet firm obligations to gas suppliers, and the entire chain is weakened.”
