The Nigerian Electricity Regulatory Commission (NERC) has issued a stern warning to state governments and their regulatory agencies, cautioning them against interfering in tariff decisions related to electricity supplied through the national grid.
The warning follows the controversial decision by the Enugu State Electricity Regulatory Commission (EERC) to slash Band A tariffs from N209 to N160 per kilowatt-hour for MainPower Electricity Distribution Limited customers.
NERC emphasised that tariff-setting for electricity sourced from the national grid remains under exclusive federal jurisdiction.
According to the commission, while states with full regulatory autonomy can determine tariffs for electricity generated and distributed solely within their borders, they are not permitted to regulate power that originates from the national grid or federal licensees.
“States do not have jurisdiction over the national grid and over electric power stations established under federal laws or operating under licenses issued by the commission,” NERC stated.
“Any attempt to do so risks introducing distortions into the national electricity market and must be backed by subsidies if pursued.”
NERC revealed it is currently engaging with the EERC over its recent tariff directive, tagged EERC/2025/003, noting that MainPower receives 100% of its electricity from the national grid.
The commission said the new rate set by EERC drastically underestimates actual generation costs, assuming a generation tariff of just N45.75/ kWh compared to the NERC-approved N112.60/kWh, effectively embedding a subsidy of N66.85/kWh without any federal budgetary provision.
The move has ignited criticism from several industry stakeholders who argue that EERC’s action is unlawful and threatens to destabilize the already fragile power sector, which is burdened with over N5.2 trillion in revenue shortfalls.
Sunday Oduntan, Executive Director of the Association of Nigerian Electricity Distributors (ANED), described the tariff cut as “reckless and misleading.”
“A 20-hour daily power supply at N160/kWh is simply not feasible,” he said. “States cannot legislate tariffs for electricity supplied from the national grid. This is a federal mandate, and Enugu’s action is setting a dangerous precedent.”
Oduntan, warned that the move has already led to unrealistic expectations among consumers in other states, some of whom are now demanding similar tariff reductions or withholding payment of their electricity bills.
Dr. Joy Ogaji, CEO of the Association of Power Generation Companies (APGC), also condemned the EERC decision, calling it “economic fiction.” She stressed that the so-called subsidy assumption has no legal or financial foundation.
“You can’t create subsidies on paper without the money to fund them. This move is not backed by any federal policy and could derail investor confidence in the power sector,” Ogaji warned. “This kind of regulatory freelancing is not only unsustainable but dangerous.”
In its defense, the EERC claimed the new rate was based on actual service costs in Enugu and designed to ensure fairness for consumers. Reuben Okoye, Commissioner for Electricity Market Operations at EERC, said the state regulator did not violate any rules and insisted that the reduction does not affect national power generation.
“This is about transparency and affordability,” Okoye said. “Our goal is to build a more consumer-friendly electricity market in Enugu State.”
However, NERC has made it clear that any state regulator that wants to modify national grid tariffs must either seek federal approval or provide subsidies to cover the shortfall, a financial commitment Enugu State has not made.
Legal experts and energy analysts have also weighed in on the controversy, noting that the new Electricity Act encourages state involvement in power regulation but does not permit overreach into federal territory.
Barrister Timi Oche, an expert in energy law, explained: “The national grid is federal infrastructure. If a state wants to create its own generation and distribution networks, it can regulate them. But it cannot dictate prices for power it doesn’t control or subsidise.”
As the dialogue between NERC and EERC continues, the situation serves as a litmus test for the newly decentralized electricity regulatory structure in Nigeria. While the Electricity Act of 2023 allows states to establish their own electricity markets, the Enugu episode has revealed the urgent need for clearer boundaries, and perhaps a regulatory reset.
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Isaac Asabor
Isaac Asabor is a Reporter with Independent Newspapers Limited. He has ample years of experience in reportorial and editorial duties. An alumni of both University of Lagos and Olabisi Onabanjo University, and presently covers Consumer Affairs beat, edits Niger-Delta and Marketing/Brand Pages that are published on Mondays and Wednesdays,, on Independent Newspaper. He is also a member of the Nigerian Institute Of Public Relations, NIPR.
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