Several Nigerian states, led by Enugu, are asserting their constitutional right to regulate electricity distribution and set end-user tariffs within their jurisdictions—pushing back against the Federal Government’s claims through the Nigerian Electricity Regulatory Commission (NERC) that only it retains such authority.
The crux of the dispute lies in a recent decision by the Enugu State Electricity Regulatory Commission (EERC) to slash electricity tariffs for Band A customers from ₦209/kWh to ₦160/kWh, sparking immediate backlash from federal electricity agencies and power stakeholders.
At a high-level webinar hosted by Lagos State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, Enugu State’s Special Adviser on Power, Joe Aneke, defended the tariff cut, saying it only covered distribution costs, while leaving generation and transmission tariffs—regulated by NERC—untouched.
“We didn’t alter generation or transmission costs,” Aneke explained. “We based our tariff review purely on verified distribution data from MainPower, and that falls within our jurisdiction according to the 2023 Electricity Act and the Fifth Constitutional Alteration.”
The 2023 Electricity Act decentralised electricity regulation, granting states the power to establish their own regulatory bodies and oversee electricity markets within their borders. States argue this decentralisation means they can now legally determine tariffs based on localized distribution realities—especially where the electricity is supplied from off-grid or distributed energy sources.
However, NERC insists that states lack jurisdiction over the national grid and grid-tied generation assets, and any deviation from standard tariffs would “distort market dynamics” and potentially create a financial crisis in the Nigeria Electricity Supply Industry (NESI).
“All tariffs must reflect wholesale market realities,” NERC said in a statement. “States must either maintain the standard national cost structure or fund the difference through subsidies.”
Adding weight to this position, the Association of Power Generation Companies (GenCos) and the Association of Nigerian Electricity Distributors (DisCos) reiterated that since states neither generate nor transmit power, they have no authority to determine pricing structures on those fronts.
Aneke revealed troubling discrepancies uncovered during the EERC’s tariff review process. For instance, MainPower, the Enugu distribution company, initially claimed ₦9 billion in costs. However, a forensic audit by the state commission showed the actual cost was closer to ₦7.5 billion.
“We verified office space claims, operational expenses, and customer data,” Aneke said. “The numbers simply didn’t add up. Why should customers pay ₦50 million in office costs when only ₦15 million is justifiable?”
He stressed that the goal is not to stifle investment but to balance fair pricing with sustainable profits for operators.
The Managing Director of the Niger Delta Power Holding Company (NDPHC), Jennifer Adighije, warned that unilateral tariff cuts by states could destabilize the national electricity market.
“Our plants are grid-tied and regulated by NERC. Until a state controls the full value chain—from generation to distribution—it cannot set tariffs independently,” she argued.
Nevertheless, Lagos’ Energy Commissioner, Biodun Ogunleye, countered that even within the existing regulatory framework, there is room to push for lower tariffs, especially when economic variables like foreign exchange rates shift.
“If we can submit proposals for tariff increases under MYTO (Multi-Year Tariff Order), we should also be able to do the same for tariff reductions,” Ogunleye asserted.
As the Enugu Electricity Commission prepares to meet with MainPower over the tariff dispute this week, the broader national debate on fiscal federalism and power sector deregulation continues to heat up.
Industry experts believe that resolving the standoff will require clearer policy alignment, federal-state collaboration, and possibly judicial interpretation to define the limits of regulatory powers in the post-2023 Electricity Act era.