The Nigerian Electricity Regulatory Commission (NERC) has granted regulatory authority to Enugu, Ekiti, and Ondo states, allowing them to oversee electricity generation, transmission, and distribution within their respective jurisdictions.
This significant shift in power distribution marks a departure from NERC’s longstanding monopoly over the electricity market, as outlined in the amended Electricity Act of 2023.
According to Sanusi Garba, Chairman of NERC, and Dafe C. Akpeneye, Commissioner of Legal, Licensing, and Compliance, this transfer of regulatory oversight became effective on May 1, 2024, following presidential assent to constitutional amendments on March 17, 2023.
The amended legislation empowers state governments to legislate and regulate electricity matters within their territories, thereby decentralizing control of the power sector.
The decision to delegate regulatory powers to Enugu, Ekiti, and Ondo states aligns with Paragraph 14(b) of the Second Schedule to the 1999 Constitution, as amended, which grants state houses of assembly the authority to legislate on electricity matters within their borders.
This shift signifies a fundamental change in the governance structure of the Nigerian Electricity Supply Industry (NESI), presenting new opportunities and challenges for state governments.
While these states move to assume regulatory control over their electricity markets, questions linger about their financial capacity and readiness to manage the complexities of the power sector.
Despite legislative autonomy, effective operation and sustainability will depend on the states’ ability to navigate issues such as infrastructure development, tariff regulation, and customer service.
Enugu, Ekiti, and Ondo states are now tasked with licensing and regulating electricity companies operating within their boundaries. For instance, the Enugu State Electricity Regulatory Commission (EERC) will oversee the activities of Enugu Electricity Distribution Company (EEDC) within the state.
Similarly, the Ekiti State Electricity Regulatory Bureau (EERB) and Ondo State Electricity Regulatory Bureau (OSERB) will assume regulatory authority over their respective power distribution companies.
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However, it’s important to note that the regulatory commissions’ jurisdiction is limited to intra-state activities, excluding areas under the franchise of neighboring states. Additionally, the establishment of state regulatory bodies does not absolve the Federal Government of its regulatory responsibilities in areas not covered by state legislation.
This move by NERC reflects a broader trend towards decentralization and empowerment of state governments in managing critical sectors such as power.
While it presents new opportunities for states to drive development and innovation in the energy sector, the success of these initiatives will depend on effective governance, strategic planning, and robust regulatory frameworks.
