The Nigerian Electricity Regulatory Commission (NERC) has cautioned state governments and electricity regulators against setting tariffs for electricity supplied through the national grid, insisting such authority remains the exclusive preserve of the federal government.
This warning comes in the wake of a controversial tariff reduction announced by the Enugu State Electricity Regulatory Commission (EERC), which slashed the Band A electricity tariff from N209 to N160 per kilowatt-hour for consumers served by MainPower Electricity Distribution Limited.
In a notice issued Thursday, NERC clarified that while states with full regulatory oversight can set tariffs for intrastate electricity markets, they cannot regulate power supplied via the national grid or from stations licensed by NERC.
“As states do not have jurisdiction over the national grid and over electric power stations established under federal laws or operating under licences issued by the commission,” NERC stated, “they must holistically incorporate the wholesale costs of grid supply without deviation or be prepared to intervene with subsidies.”
The commission also disclosed that it is in discussions with the EERC regarding the recently issued Tariff Order (EERC/2025/003) for MainPower, which currently receives 100% of its electricity from the national grid. The tariff order has sparked criticism from key players in the Nigerian Electricity Supply Industry (NESI), who warn it could undermine a sector already burdened by over N5.2 trillion in unpaid revenue shortfalls.
According to NERC, the EERC’s rate of N160.4/kWh assumes a drastic reduction in the generation tariff from N112.60 to N45.75/kWh, effectively embedding a subsidy of N66.85/kWh — despite no federal policy or budgetary provision to fund such a subsidy.
Industry stakeholders have raised alarm. Sunday Oduntan, CEO of the Association of Nigerian Electricity Distributors (ANED), described the move as illegal and economically reckless, urging customers in Enugu not to celebrate the cut prematurely.
“No state has the authority to fix tariffs for electricity from the national grid,” he said. “A 20-hour daily power supply at N160/kWh is simply unsustainable without collapsing the entire electricity value chain.”
Oduntan further warned that the Enugu tariff slash has triggered unrealistic consumer expectations in other states, with customers demanding similar cuts or refusing to pay their bills altogether.
Joy Ogaji, CEO of the Association of Power Generation Companies (APGC), echoed the concerns, saying EERC cannot fix prices for electricity it does not generate. She dismissed the subsidy assumption as “imaginary,” stressing that it lacks any financial or policy support from the Federal Government.
“You can’t build something on nothing,” Ogaji said. “Tariff frameworks are critical to investor confidence. This kind of regulatory rascality is dangerous and unsustainable.”
In response, EERC defended its decision, saying the new tariff was based on MainPower’s actual cost of service and was designed to foster a transparent and sustainable electricity market in Enugu State. Reuben Okoye, EERC’s Commissioner for Electricity Market Operations, insisted that the state regulator’s move does not affect the cost of power generation nationally.
As the debate continues, NERC’s position underscores the legal boundaries around state regulatory powers in Nigeria’s evolving electricity landscape, one where constitutional roles, market realities, and consumer expectations are rapidly colliding.
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