Power devolution: NERC cedes regulatory powers over Enugu to State government
In a groundbreaking move, the Nigerian Electricity Regulatory Commission (NERC) has ceded its regulatory powers of the Enugu electricity market to the Enugu Electricity Regulatory Commission (EERC), which is owned by the state government with effect from May 1, 2024.
This is the first-ever transfer of regulatory powers from the NERC to a state government electricity regulator.
This strategic shift was detailed in a memo released by NERC, bearing signatures from its Chairman, Sanusi Garba, and Commissioner for Legal, Licensing, and Compliance, Dafe Akpeneye, dated April 22, 2024.
The transfer is a direct result of recent legislative changes that have decentralised the power sector.
These changes were set into motion in March 2023 when former President Muhammadu Buhari signed amendments to Nigeria’s constitution that removed power generation, transmission, and distribution from the exclusive legislative list, effectively ending the federal government’s sole jurisdiction over these areas.
Under the new legal framework established by the Electricity Act 2023, states now have the authority to manage and regulate their electricity markets.
The amended Paragraph 14(b) Part II of the Second Schedule to the 1999 Constitution empowers state governments to legislate on electricity provision within their territories.
According to NERC, the Enugu Electricity Regulatory Commission (EERC) now holds the exclusive authority to set and adopt end-user electricity tariffs within Enugu State, tailoring these charges to local conditions and requirements.
While EERC manages local tariff methodologies, any electricity sourced from grid-connected plants and the related tariffs for generation and transmission services must still receive approval from the Nigerian Electricity Regulatory Commission (NERC), ensuring alignment with national energy policies.
Ultimately, the final tariffs approved by EERC for consumers in Enugu will be definitive for the state, with the Enugu State Government responsible for supporting and implementing tariff-related policies, ensuring that electricity pricing is both fair and attuned to the specific needs of the state’s residents.
The memo from NERC states, “This regulatory instrument may be cited as the Order of Transfer of Regulatory Oversight of the Electricity Market in Enugu State from NERC to the Enugu State Electricity Regulatory Commission (EERC). This Order shall take effect from May 1, 2024.”
Furthermore, the memo outlines the framework under which states can establish their regulatory authorities and manage the transition of oversight.
According to Section 230 of the Electricity Act 2023, states intending to regulate their electricity markets must notify NERC and the relevant distribution licensee.
NERC is then required to prepare a transition plan within 45 days, detailing the transfer of regulatory responsibilities to the state regulator—a process to be completed within six months of notification.
This decentralisation initiative aims to enhance efficiency and responsiveness in the management of electricity services by aligning regulatory oversight more closely with local needs and conditions.
