The distribution companies (DisCos) have been consulting among themselves in recent weeks over the declaration of the eligible customers policy in the Nigerian electricity market and have finally resolved to challenge the ministerial declaration in court, The Cable reports.

Under the declaration, big consumers of electricity — those who use nothing less than 2MW per month — are now allowed to buy directly from generating companies (GenCos) and bypass the DisCos. While the GenCos are happy with the development — it will allow them to sell “stranded” capacity and also address the issue of unpaid power supply — DisCos are of the opinion that it will harm their business.

“It is illegal and injurious to our financial health,” an insider said. The DisCos depend on big consumers for revenue because of the culture of unpaid bills and energy theft among smaller customers. They are also often unable to buy all the power on offer from GenCos owing to financial constrains, leading to “stranded” capacity, this time with the generating companies at the losing end.