The Nigerian Electricity Regulatory Commission (NERC) has clarified that state governments do not have jurisdiction over the national electricity grid or power stations established under federal laws or operating with licences issued by the commission.
The clarification came in response to recent controversy sparked by the Enugu State Electricity Regulatory Commission’s decision to reduce Band A electricity tariffs.
In a notice issued on Thursday, NERC acknowledged that while states that have assumed full regulatory control over their intrastate electricity markets can now develop and regulate transactions within their territories—including setting tariffs for end-use customers—they must reflect actual wholesale energy costs in any tariff structure.
Where states choose to apply lower tariffs, NERC emphasized that they must be prepared to fund the resulting shortfall through subsidies.
“The regulatory authority of states does not extend to the national grid or to power stations established under federal laws or operating under federal licences,” the commission stated.
Meanwhile, power generation and distribution companies have warned that states’ absolute regulatory authority over tariffs can only begin once they independently generate and transmit electricity.
The development underscores the evolving complexity in Nigeria’s electricity sector as decentralization and reforms unfold in line with the 2023 Electricity Act.
