Keypoints
- Fifteen Nigerian states have officially transitioned to regulating their own electricity markets as of February 2026.
- The shift, empowered by the Electricity Act 2023, transfers regulatory authority from the federal level to State Electricity Regulators (SERs).
- States now in control include Lagos, Oyo, Edo, Abia, and Anambra, with Bayelsa being the most recent to join on February 20, 2026.
- State regulators are now responsible for driving local investment, managing market growth, and ensuring customer protection within their borders.
Main Story
The decentralization of Nigeria’s power sector has reached a major milestone as 15 states have successfully transitioned to independent electricity market regulation.
According to a timeline released by the Nigerian Electricity Regulatory Commission (NERC) on Wednesday, the move marks a significant departure from the centralized model, allowing states to leverage the Electricity Act 2023 to manage their own energy futures.
Enugu, Ekiti, and Ondo were the first to make the leap in October 2024, followed by a steady stream of states through 2025, including industrial hubs like Lagos and Ogun.
Most recently, Nasarawa and Bayelsa completed their transitions in early 2026. Under this new structure, State Electricity Regulators (SERs) are empowered to issue licenses, set tariffs tailored to local economic realities, and oversee the distribution and generation assets operating exclusively within their state boundaries.
The Issues
The primary challenge in this transition is the regulatory-capacity gap; while states now have the legal right to regulate, many SERs are still building the technical expertise required to manage complex power grids. Authorities must solve the problem of interstate energy flows, as electricity generated in a “federal” plant but consumed in a “state-regulated” market creates complex jurisdictional questions. Furthermore, there is an investor-certainty risk; businesses may be wary of a fragmented market where rules change when crossing state lines. To ensure success, NERC must maintain a “supervisory” role to ensure that state-level customer protection standards remain robust and that the national grid remains stable despite the localized management.
What’s Being Said
- “States are taking charge! Their State Electricity Regulators are now responsible for driving local market growth,” stated NERC Nigeria.
- Energy legal experts noted that the Electricity Act 2023 has effectively ended the federal government’s monopoly on regulation, creating a “competitive federalism” in the power sector.
- Governors of the transition states have argued that local regulation will allow them to attract “off-grid” investments and solve the specific power needs of their industrial clusters.
- Consumer rights advocates expressed cautious optimism, noting that SERs must be “accessible and transparent” to prevent local monopolies from exploiting residents.
What’s Next
- State Electricity Regulators are expected to begin calling for “Expressions of Interest” from private firms to build independent power plants (IPPs) specifically for state consumption.
- NERC is anticipated to continue providing “technical hand-holding” to the remaining 21 states as they prepare their own transition documents through 2026.
- Lagos and Ogun are likely to lead the way in creating “inter-state” energy corridors to support the heavy industrial activities in the Shagamu-Lagos axis.
- A national database of SER rulings is expected to be established to help investors track regulatory trends across the 15 independent markets.
Bottom Line
The transition of these 15 states signals the birth of a truly sub-national electricity market in Nigeria. By moving regulation closer to the consumer, the Electricity Act 2023 is betting that local accountability will succeed where federal centralization has historically struggled.
