By Elizabeth Godwin
The Nigerian Electricity Regulatory Commission (NERC) has stated that the Enugu Electricity Regulatory Commission (EERC) does not have the legal authority to set electricity tariffs when the power in question is generated and transmitted from the national grid.
In a statement released on its website on Friday, NERC clarified that while the 2023 Electricity Act empowers state governments to regulate electricity within their borders, this authority is limited. It does not extend to infrastructure or power sources tied to the national grid or operating under federal licenses.
This clarification comes in response to EERC’s recent directive reducing electricity tariffs for Band A customers served by Mainpower Electricity Distribution Ltd (MEDL) from ₦209.5/kWh to ₦160.4/kWh. The move has drawn concern from stakeholders within the Nigerian Electricity Supply Industry (NESI), who argue the reduction could destabilize the market.
NERC explained that states must reflect the full wholesale costs of grid electricity in their pricing structures unless they plan to subsidize the difference. In this case, EERC’s order reportedly slashed the average generation tariff from ₦112.60/kWh to ₦45.75/kWh—creating a gap of ₦66.85/kWh assumed to be subsidized.
The commission warned that decisions that distort generation, transmission, and legacy financing costs could trigger a financial imbalance in the sector. It emphasized that neither NERC nor sub-national regulators like EERC are permitted to take actions that jeopardize the national grid or the broader electricity market.
Citing Section 34(1) of the Electricity Act, NERC reiterated its mandate to create and preserve a stable and efficient electricity market across Nigeria. It acknowledged EERC’s parallel obligations at the state level but insisted such actions must align with constitutional and regulatory frameworks.
NERC said it is currently engaging EERC to address areas of possible misinterpretation, particularly concerning grid power costs. The commission reaffirmed its commitment to ensuring cost recovery and regulatory stability in line with national laws.
