- GenCos have opposed the Enugu Electricity Regulatory Commission’s plan to cut Band A tariffs from ₦209/kWh to ₦160/kWh.
- They warn the move undercuts actual generation costs and threatens the financial stability of the power sector.
Nigeria’s power generation companies (GenCos) have strongly opposed the Enugu Electricity Regulatory Commission’s (EERC) plan to slash Band A electricity tariffs, warning that the decision rests on flawed subsidy assumptions and endangers the country’s fragile power sector.
The Association of Power Generation Companies (APGC), in a statement issued on Monday, July 21, by its CEO, Joy Ogaji, criticised the EERC’s new tariff order, which reduces Band A rates in Enugu State from ₦209/kWh to ₦160/kWh effective August 1, 2025.
Ogaji said the decision sets a dangerous precedent for other states and fails to reflect the actual cost of generating electricity. “This tariff order grossly underrepresents generation costs. Only ₦45 of the actual ₦112/kWh cost is captured for power generation,” she said.
The EERC announced the new order on Sunday, July 20. Order No. EERC/2025/003 stated it was a cost-reflective tariff based on the Federal Government’s generation subsidy. The order applies to MainPower Electricity Distribution Limited, a new Enugu Electricity Distribution Company (EEDC) subsidiary operating in the state.
EERC Chairman Chijioke Okonkwo explained that the commission thoroughly reviewed MainPower’s tariff and licence applications using its 2024 Tariff Methodology Regulations and Distribution Tariff Model. “We derived an average tariff of ₦94 based on FG’s subsidy of ₦45 per kWh. Band A customers will now pay ₦160 to help MainPower manage rate shocks and ensure sustainability,” Okonkwo said.
However, GenCos argue that no such subsidy exists in policy or practice. Ogaji countered that the so-called subsidy is merely a debt accumulation. “There is no FGN policy on electricity subsidy. What exists is an unsustainable buildup of sector debt. Enugu State’s assumption that the Federal Government will fill a 60% funding gap is both unrealistic and misleading,” she said.
She warned that the new tariff structure exposes a larger issue in Nigeria’s ongoing power decentralisation efforts. “This move by EERC suggests a reliance on federal subsidies while ignoring Enugu’s share of legacy sector debts. Are they assuming assets without liabilities? How do they intend to attract investors with tariffs that don’t reflect real costs?” Ogaji asked.
Furthermore, she emphasised that the GenCos are currently owed over ₦4 trillion. The Federal Government’s 2025 budget allocates only ₦900 billion for electricity support, less than half the annual generation invoice of ₦3 trillion (₦250 billion per month).
“The budget is inadequate and cannot even cover current obligations. Worse still, there’s no clear framework, no cash payments, debt swaps, or financial instruments, to settle these arrears,” Ogaji stated.
Ogaji questioned the logic of introducing a new subsidy regime for Band A customers in Enugu when the Nigerian Electricity Regulatory Commission (NERC) removed such subsidies nationwide on April 1, 2024.
Meanwhile, industry stakeholders have echoed GenCos’ concerns, calling on state regulators to ensure cost transparency and fiscal responsibility as more states assume electricity market control under Nigeria’s power sector decentralisation framework.