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HomeLatestHistoric Shift as Enugu State Assumes Control of Electricity Regulation

Historic Shift as Enugu State Assumes Control of Electricity Regulation

Toba Owojaiye reporting
Abuja , Nigeria

In a groundbreaking move, the Nigerian Electricity Regulatory Commission (NERC) has granted control of monitoring the Enugu electricity market to the Enugu Electricity Regulatory Commission (EERC), an agency under the state government, effective May 1, 2024.

Truth Live News gathered that this august transfer of regulatory authority signifies a departure from the traditional federal control over electricity regulation. It is the first time such powers have been devolved to a state-level regulator, marking a pivotal moment in Nigeria’s energy landscape.

The shift in regulatory power was set in motion by amendments to Nigeria’s constitution in March 2023, which removed power generation, transmission, and distribution from the exclusive legislative list. Consequently, states now have the autonomy to manage and regulate their electricity markets, as outlined in the Electricity Act 2023.

Under this new framework, the Enugu Electricity Regulatory Commission (EERC) gains exclusive authority to set and adopt end-user electricity tariffs within Enugu State, tailored to local conditions. However, tariffs related to generation and transmission services must still receive approval from NERC to ensure alignment with national energy policies.

The Enugu State Government is tasked with supporting and implementing tariff-related policies to ensure fairness and alignment with residents’ needs.

Furthermore, the Enugu Electricity Distribution Company PLC (EEDC) is mandated to establish a subsidiary, EEDC SubCo, exclusively for supplying and distributing electricity within Enugu State. This subsidiary must secure a license from the EERC within 60 days of the order’s effective date.

The move aims to establish a self-contained electricity distribution framework within the state, enhancing management and regulatory oversight.

This shift towards localized regulation represents a significant departure from the centralized control previously held by federal authorities. States now have the flexibility to tailor energy policies to suit local needs, promoting more efficient and sustainable energy use.

NERC will retain its role as the central regulator for inter-state and international electricity transactions, ensuring compliance with national standards. Meanwhile, states will regulate generation, transmission, and distribution within their territories, as well as promote rural electrification projects and integrate renewable energy sources into local grids.

This move by NERC to cede control to EERC could serve as a model for other states, heralding a new era of competition and localized management in Nigeria’s electricity sector.

According to Odion Omonfoman, CEO of New Hampshire Capital Limited, the shift is expected to increase market participants and spur local investments in state electricity markets, leading to greater innovation and investment.

While existing utilities will maintain significant market presence, they will need to adapt to maintain competitiveness. State regulators will focus on ensuring improved service delivery, benefiting consumers with more reliable and potentially cost-effective electricity services.

Online, many have praised the President for initiating steps towards regional and state control of resources, urging further expansion of this approach across more states and sectors of the economy.

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