- NERC will transfer regulatory authority over Edo State’s electricity market to the Edo State Electricity Regulatory Commission (ESERC).
- Benin Electricity Distribution Company (BEDC) must create a new subsidiary, BEDC SubCo, to handle local electricity supply and distribution.
- The transition, including ESERC’s licensing of BEDC SubCo, must be completed by February 20, 2025.
The Nigerian Electricity Regulatory Commission (NERC) has announced a significant change in the regulatory landscape for Edo State’s electricity market. Effective Wednesday, NERC will transfer its regulatory authority over the electricity sector to the Edo State Electricity Regulatory Commission (ESERC).
This decision aligns with the recent amendments to the Constitution of the Federal Republic of Nigeria and the Electricity Act 2023 (Amended). Under this updated legal framework, NERC will continue to exercise oversight over inter-state and international electricity operations. This includes critical areas such as generation, transmission, supply, trading, and system management, which remain under its jurisdiction.
The Electricity Act 2023 provides a straightforward process for states wishing to assume control of their intrastate electricity markets. It mandates that any state planning to manage its electricity market must formally notify NERC and request the transfer of regulatory authority to its state regulator. This procedure ensures a structured transition of responsibilities.
Edo State has adhered to these requirements. The state government officially communicated its intention to NERC, formally requesting the transfer of oversight responsibilities. Following this notification, NERC issued a formal transfer order.
The transfer order includes several vital directives. It requires the Benin Electricity Distribution Company (BEDC) to establish a new subsidiary, BEDC SubCo. This new entity will assume responsibility for the supply and distribution of electricity within Edo State. BEDC has a deadline of 60 days from August 21, 2024, to complete the formation of BEDC SubCo.
In addition to forming BEDC SubCo, BEDC must ensure that the new subsidiary applies for and secures a license from ESERC. This license is crucial for BEDC SubCo to legally manage and operate the intrastate electricity market in Edo State.
NERC’s order stipulates a comprehensive timeline for this transition. All aspects of the regulatory shift, including establishing BEDC SubCo and the licensing process, must be completed by February 20, 2025. This timeline allows for a smooth and orderly transition of oversight responsibilities to ESERC.
The transition marks a significant step in decentralising electricity market regulation in Nigeria. It gives states more control over their local electricity sectors while maintaining NERC’s role in overseeing broader, inter-state, and international operations. This shift aims to enhance the efficiency and effectiveness of electricity regulation at both the state and national levels.