By Ejire Folakunmi
The Ondo State Government has formally asserted its regulatory sovereignty over the state’s electricity market, declaring that the federal regulator, the Nigerian Electricity Regulatory Commission (NERC), lacks the authority to interfere with power assets situated within the state’s jurisdiction.
The Ondo State Electricity Regulatory Bureau (OSERB) has officially notified NERC of its approval for a leasing arrangement between the Ondo State Power Company (OSPC) and the Niger Delta Power Holding Company (NDPHC).
This agreement specifically involves the utilization of critical infrastructure, including the 33kV distribution line from Omotosho to Rubber Estate and the 30km line extending to Fortune University, Igbotako.
The Commissioner for Energy and Mineral Resources, Engr. (Dr.) Johnson Alabi stated that any attempt by NERC to reassign control over these assets is ultra vires and legally unsustainable.
He emphasized that once electricity infrastructure is operationally integrated into a state’s market, it becomes part of that state’s Regulatory Asset Base (RAB), placing it solely under the governance of the local regulator to avoid duplication, tariff distortions, and investment uncertainty.
This standoff in Ondo State is a landmark moment in the implementation of the Electricity Act 2023, which transitioned Nigeria from a centralized power model to a Federated Electricity Market.
The core of the dispute lies in the “handover” process; under the new law, once a state establishes its own regulatory body and the transfer of oversight is complete, NERC’s federal authority ceases to exist within that state’s borders for local distribution and generation.
The invocation of the Regulatory Asset Base (RAB) is a sophisticated technical argument that challenges the old order of the Benin Electricity Distribution Company (BEDC).
By moving these assets into the state’s RAB, Ondo is effectively creating a “ring-fenced” economy where the state can set its own tariffs and service standards independent of federal bottlenecks.
This is a mechanical necessity for state governments that want to attract private investors who are often wary of the federal grid’s systemic inefficiencies.
This case serves as a legal blueprint for other Nigerian states, proving that the relationship between federal and state regulators is now one of constitutional concurrency rather than a top-down hierarchy.