Following the enactment of the Electricity Act 2023 by President Bola Tinubu, seven Nigerian states—Enugu, Ondo, Ekiti, Imo, Oyo, Edo, and Kogi—have assumed control over power generation, transmission, distribution, and regulation within their borders. This decentralisation marks a historic departure from the previous structure, which gave the Nigerian Electricity Regulatory Commission (NERC) sole regulatory authority nationwide.
Other states such as Lagos, Ogun, Niger, Plateau, and Anambra are also in various stages of transitioning. While Lagos and Ogun are set to complete the process this month, Niger and Plateau will follow in July and September respectively. Anambra has passed its own electricity law and has inaugurated its State Electricity Regulatory Commission.
NERC, which previously regulated all electricity operations across the country, is now transferring regulatory functions to qualifying states. It has already issued 11 transfer orders with a six-month handover timeline for each. Under the new structure, states will license and supervise electricity distribution companies (Discos) and other market players within their jurisdictions.
As part of the transition, existing Discos must establish subsidiaries to operate within individual states. For instance, the Enugu Electricity Distribution Company created a subsidiary—MainPower Electricity Distribution Limited—licensed by the Enugu State Electricity Regulatory Commission (EERC).
While industry experts welcome the decentralisation as a move toward competitiveness and efficiency, concerns remain over capacity, manpower, regulatory clarity, subsidy handling, and asset delineation. A senior NERC official, speaking anonymously, highlighted that many states may lack the technical and institutional readiness for such responsibilities, especially in areas like tariff setting and enforcement.
Stakeholders also flagged electricity theft, asset management, and uneven subsidy implementation as looming challenges. States now have the discretion to subsidise electricity for residents or allow market-based pricing, potentially creating disparities in access.
Despite these concerns, states like Enugu and Lagos are seen as better prepared. Enugu has already begun enforcing regulations and even sanctioned a power provider over overbilling. Lagos, leveraging its experience with independent power projects, has issued its first regulatory order under the Lagos State Electricity Regulatory Commission (LASERC).
Advocates like PowerUp Nigeria’s Adetayo Adegbemle and Nigeria Consumer Protection Network’s Kunle Olubiyo described the reform as long overdue and a reflection of true federalism. They emphasised the need for strong institutional frameworks and consumer protection to avoid regulatory failure or exploitation.
Ekiti and Ondo States also affirmed their readiness. Ekiti has set up its Electricity Regulatory Bureau and called for the creation of subnational Discos from existing ones. Ondo, which passed its electricity law in 2020, has functional regulatory and operational bodies and has engaged with the Benin Electricity Distribution Company to facilitate a smooth transition.
Experts urged continuous collaboration between federal and state regulators to minimise disruptions, especially in asset delineation and inter-state grid operations. They also called for sustained capacity building, policy alignment, and dialogue among stakeholders to ensure the reform translates into tangible improvements for consumers and investors alike.
ADEOLA KUNLE
