The Nigerian Electricity Regulatory Commission (NERC) has rejected a tariff reduction announced by the Enugu Electricity Regulatory Commission (EERC), sparking a new round of debate over regulatory boundaries and electricity pricing in Nigeria’s power sector.
In a notice released Thursday, NERC said it is formally engaging EERC over its controversial Multi-Year Tariff Order (MYTO), which reduced the tariff for Band A customers in Enugu State from ₦209/kWh to ₦160.4/kWh, effective August 1, 2025.
NERC — the apex regulatory authority — clarified that state electricity regulators do not have jurisdiction over the national grid or federally licensed power stations, emphasizing that any deviation from wholesale costs in tariff design must either be corrected or subsidized by the state.
“As states do not have jurisdiction over the national grid and over electric power stations established under federal laws… they must holistically incorporate the wholesale costs of grid supply… or be prepared to make a policy intervention by way of a subsidy,” the Commission stated.
The EERC’s tariff announcement had directed MainPower, the Enugu Electricity Distribution Company, to adopt the reduced rate, a move that sparked criticism from electricity distribution companies (DisCos) and generation companies (GenCos). Industry players warned that such unilateral cuts could undermine the financial integrity of the national electricity supply chain.
The Association of Nigerian Electricity Distributors (ANED), through its CEO, Sunday Oduntan, issued a strong warning to customers under Enugu’s Band A category. He advised them not to be “deceived” by the lower rate, stating that the ₦160.4/kWh tariff could lead to inferior or unreliable power supply, given the financial gap it creates.
Also weighing in, the Minister of Power, Adebayo Adelabu, through his spokesperson, reiterated that the federal government does not support the removal of electricity subsidies at the state level — a stance that further complicates EERC’s decision to alter tariff frameworks without national alignment.
EERC had earlier claimed that its new tariff structure was tailored to local realities and meant to ease the burden on consumers. However, NERC’s reaction makes clear that state-level autonomy has its limits under the current national regulatory framework.
The 2023 Electricity Act decentralised the power sector, granting states authority to establish local electricity markets. Yet, NERC maintains oversight over the national grid, inter-state transmission, and any operator licensed under federal law, effectively curbing unilateral state actions that may ripple across the broader Nigerian Electricity Supply Industry (NESI).
NERC’s intervention underscores the fragile balance between decentralisation and coordination in Nigeria’s evolving electricity sector. As discussions between NERC and EERC continue, the controversy raises deeper questions about the practical implementation of power sector reforms and the financial sustainability of tariff decisions made at the subnational level.