Despite the privatization of the Nigerian DElectricity Supply Industry (NESI), the expectation of consumers has not been met, resulting to increased dissatisfaction with the current state of affairs. Although the malaise in the NESI is not limited to any segment of the value chain, the distribution segment is often perceived as the face of the sector being the last mile that interfaces with the end users in the electricity value chain.
As part of the critical approaches to address the issues behind the operational inefficiencies of the distribution segment of the value chain, Nigerian Electricity Regulatory Commission (NERC) released a consultation paper which seeks to propose a regulatory framework for electricity distribution franchising in the Nigerian Electricity Supply Industry (NESI). Some of the operational issues sought to be addressed by the proposed sub-franchising arrangement arethe funding and infrastructure gaps, the power supply deficit, low customer satisfaction and technological deficiencies within each of the distribution company's (Discos) network area. In this report, we undertake a detailed analysis of some of the issues that may arise in the proposed arrangement given the present state of the distribution segment within the NESI. Subsequently, we outline several considerations for all parties involved in the franchising arrangement.