By SUNDAY ABBA, Abuja
Following the dust raised among stakeholders by the recent electricity tariff cut announced by Enugu Electricity Regulatory Commission (EERC), the Nigerian Electricity Regulatory Commission (NERC) has intervened, appealing for calm.
In a public notice released late Thursday, the Commission said it is already engaging EERC on their tariff order as it relates to any perceived area of misinterpretation/misunderstanding on wholesale generation and transmission costs on their import of power from the national grid, vowing to ensure that, which ever way, the dynamics of the national electricity market are sustained in line with the provisions of the laws.
SUMMIT POST reports that EERC recently issued an order compelling MainPower Electricity Distribution Company (MPEDC), which now replaced Enugu Electricity Distribution Company (EEDC) following the transfer of oversight to the state by NERC in line with the Electricity Act (EA) 2023, to slash the electricity tariff in the South-eastern state.
The order with the number: EERC/2025/003 was entitled “Tariff Order for MainPower Electricity Distribution Limited 2025.”
This generated concerns among stakeholders, foremost of whom were the generation companies (GenCos) who felt that such move would aggravate the already over-bloated debt owed them by the market which government has not been able to address substantially, leaving the industry with chronic liquidity challenge.
Speaking on behalf of the GenCos, the Executive Secretary (ES) Association of Power Generation Companies (APC), Dr Joy Ogaji, cited N5.2 trillion debts being owed the GenCos at the moment.
This is as the Power and Energy Commissioners in the 36 states of the Federation under the aegis of the Forum of Commissioners for Power and Energy in Nigeria (FOCPEN) issued their own statement backing the move by EERC, arguing that it acted within the ambit of its regulatory provisions and has set tariffs appropriately aimed at cost-reflective and fair market for consumers and operators alike.
According NERC, since states do not have jurisdiction over the national grid and over electric power stations established under federal laws/operating under licences issued by the Commission, they must holistically incorporate the wholesale costs of grid supply to their domains without any qualification or deviation in their design of tariffs for end-use customers in order not to distort the dynamics of the market, or be prepared to make a policy intervention by way a subsidy for any deviation in the tariff structure that distorts the wholesale generation, transmission and legacy financing costs in NESI.
Part of the Commission’s notice read thus: “The Commission’s attention has been drawn to the increasing stakeholders’ concerns on the Tariff Order (Order No. EERC/2025/003) issued by the Enugu State Electricity Regulatory Commission (“EERC) to its Licensee Mainpower Electricity Distribution Limited (MEDL) that relies exclusively on electricity supply (generation and transmission) from the national grid.
“NESI stakeholders have expressed concern about the consequences of the reduction of tariffs for Band A customers in MEDL’s network area to NGN160.4 per kWh and the freezing of tariffs of customers in the other bands on the wholesale generation and transmission costs along with the financing costs for legacy obligations in NESI. It is pertinent to state that the NGN160.4 per kWh was arrived at largely by reducing the current average Generation Tariff of NGN112.60 per kWh to NGN45.75, with an assumption of subsidy component, a difference of N66.85 per kWh.
“Section 34(1) of the EA places a statutory obligation on the Commission to “create, promote and preserve efficient electricity industry and market structures, and ensure the optimal utilisation of resources for the provision of electricity and we are also aware that EERC as a sub-national electricity regulator also has a similar statutory obligation in their enabling law, and neither NERC nor EERC as responsible regulatory institutions would take decisions that expose the national grid and wholesale electricity market to a financial crisis in contravention of express powers granted to them by the Constitution.
“All stakeholders are advised to note that the Commission is currently engaging EERC on their tariff order as it relates to any perceived area of misinterpretation/misunderstanding on wholesale generation and transmission costs on their import of power from the national grid and grants further assurances of its unwavering statutory commitment that the electricity market will be made whole in terms of cost recovery in compliance with the laws of the Federal Republic of Nigeria.”
In accordance with the EA’2023 which aimed to discentralise ownership and control of the Nigerian electricity sector, NERC has transferred regulatory oversight over intra-state electricity markets to Edo, Ekiti, Enugu, Imo, Kogi, Lagos, Niger, Ogun, Ondo and Oyo to regulatory institutions established by those states pursuant to the provisions for orderly transfer of regulatory oversight specified in section 230 of the EA, Full regulatory oversight will be transferred to Plateau on 12 September 2025 while preparatory transfer readiness notices have been received from Abia.