- NERC ended its oversight of Enugu and Ondo States’ electricity sectors on October 21, 2024, transferring control to new state regulators EERC and OSERB.
- Both states will adopt NERC’s tariff methodology without subsidies, while Ondo State will criminalise unmetered electricity consumption.
The Nigerian Electricity Regulatory Commission (NERC) ended its oversight of electricity supply industries in Enugu and Ondo States on October 21, 2024, at 23:59 West African Time. This transition, which follows directives of the Electricity Act 2023, begins a new era of state-level regulation of electricity markets.
The Enugu State Electricity Regulatory Commission (EERC) and Ondo State Electricity Regulatory Bureau (OSERB) took complete regulatory control of their respective state electricity markets on October 22, 2024.
Key stakeholders discussed this development during a webinar titled “Powering the Future: The Transition to State Electricity Markets in Nigeria.” EERC Chairman Mr. Chijioke M. Okonkwo and OSERB Coordinator Engr. Bolawole Stephen Olugbenga led the discussions.
Both states have established regulatory frameworks for the interim period, focusing on three key areas: tariff methodology, subsidy structure, and billing practices. The states will implement NERC’s tariff methodology without the subsidy component, creating a significant shift in consumer electricity pricing.
Enugu State will follow NERC’s “Order on Capping of Estimated Billings” for estimated billing, with plans for future reviews. Ondo State has implemented stricter measures, declaring unmetered electricity consumption a criminal offence under State Law.
Industry observers highlight upcoming challenges, especially regarding consumers’ ability to pay cost-reflective tariffs without subsidies. The transition also questions the states’ strategies to tackle persistent issues in Nigeria’s power sector, including sector insolvency and high commercial and collection losses.
This transition serves as a crucial test case for Nigeria’s power sector decentralisation. Stakeholders now monitor how these states will handle their new regulatory responsibilities and address the complex electricity distribution and pricing challenges.
The outcomes in Enugu and Ondo States will influence other Nigerian states considering similar transitions under the Electricity Act 2023, potentially transforming the country’s power sector landscape in coming years.