On April 22, 2024, the Nigerian Electricity Regulatory Commission (NERC) issued an order to transfer the regulatory oversight of the electricity market in Enugu State from the Commission to the Enugu State Electricity Regulatory Commission.
According to NERC, this new order is in accordance with the Electricity Act 2023 and the amended constitution of the Federal Republic of Nigeria. It will take effect on May 1, 2024. NERC will, however, retain the role as a central regulator with regulatory oversight on the inter-state/international generation, transmission, supply, trading and system operation.
The Act, signed into law by President Bola Tinubu in June 2023, gave states the authority to generate, distribute, and develop a framework to regulate their electricity markets.
Since the enactment of the Act, Enugu State has been on the frontlines of developing its electricity market in compliance with the Act. The state also set up a working committee and regulatory framework for its electricity market.
In view of this, the Enugu State electricity market is set to see a drastic change in the coming months. Here are five things to note from the order:
- This new order will open up the electricity market in Enugu State and create job opportunities.
- Expand generation, transmission and distribution within the state and its environs.
- Grant licence for mini-grids, IEDN/IEDNQ5 and IETN, IETNOs.
- Provide the framework for the operation of these licensees, including a framework for investment in electricity utilities within the State.
- Enhance economic expansion and investment opportunities from both the public and private sectors.
What NERC expects EEDC to do
- Enugu Electricity Distribution Company (EEDC) has to incorporate a subsidiary (EEDC SubCo) within two months of receiving the notification.
- Transfer the assets, liabilities, employees and the relevant contractual rights and obligations of the successor company in Enugu State.
- Develop a transition plan and timeline for transferring regulatory oversight of the intrastate electricity market from NERC to EERC after receiving formal notification from the state.
- EEDC will complete the incorporation of EEDC SubCo within 60 days from May 1, 2024.
- EEDC SubCo will apply for and obtain a licence from EERC for the intrastate supply and distribution of electricity.