Commissioners of energy across the 36 states have expressed readiness to engage power distribution companies in negotiations over electricity tariffs to ensure rates are reflective but not burdensome on residents.
This move follows the reduction in Band A electricity tariff from N209/kWh to N160/kWh by the Enugu Electricity Regulatory Commission (EERC), a development that has faced resistance from both generation and distribution companies.
However, distribution companies have rejected the idea of negotiating tariffs with state governments, warning that such interventions could harm the power sector.
Despite this, the EERC has continued to defend its decision, while the states maintain they are empowered by the Electricity Act 2023 to regulate the sector within their jurisdictions. Already, seven states — Enugu, Ondo, Ekiti, Imo, Oyo, Edo, and Kogi — now control their electricity markets under the Act, with more states like Lagos, Ogun, Niger, and Plateau set to join by September.
Chairman of the Forum of Commissioners of Power and Energy in Nigeria and Cross River State’s Commissioner for Power and Renewable Energy, Prince Eka Williams, reiterated that state electricity regulators are empowered to determine tariffs that reflect local market realities and customer needs.
He noted that while some states may subsidise electricity for their residents, the broader goal is to ensure sufficient power supply. “States operate differently. Any governor who feels inclined can decide to shoulder the responsibility of subsidies,” Williams said.
The forum also clarified that the reduced tariff by EERC was based on a thorough assessment of the capital and operational costs of MainPower Electricity Distribution Company in Enugu. It stressed that the new rate was still cost-reflective, contrary to claims from power generation companies that it could distort the market.
The forum emphasized that states are not acting arbitrarily and are committed to removing opaque federal subsidies in favour of truly cost-reflective state-level electricity markets.
The EERC added that the Band A rate reduction did not affect the cost of generation and transmission from the national grid, which remains covered in full. The commission maintained that the revised tariff allows MainPower to recover its costs and make reasonable returns.
Reuben Okoye, EERC Commissioner for Electricity Market Operations, said the decision followed detailed analysis and that the commission is open to reviewing any evidence disputing its methodology. “There is no justification to keep Band A at N209/kWh in Enugu State. The new tariff reflects the state’s market reality,” he said.
In Lagos, however, tensions remain high. The State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, expressed frustration, stating that electricity distributors in the state are resisting state-level reforms and are reportedly behind a proposed amendment bill in the Senate aimed at limiting state control.
He noted that although negotiations are proving difficult, Lagos will unveil its tariff plan in the coming week.
