The Nigerian Electricity Regulatory Commission (NERC) has declared that the Enugu Electricity Regulatory Commission (EERC) lacks the legal authority to determine tariffs for electricity sourced from the national grid.
In a statement published on its website, NERC explained that while the 2023 Electricity Act empowers states to regulate electricity within their boundaries, such authority does not extend to grid-supplied power or federal electricity infrastructure.
This comes in response to EERC’s recent decision to reduce the tariff for Band A customers under Mainpower Electricity Distribution Ltd (MEDL) from ₦209.5/kWh to ₦160.4/kWh. The News Agency of Nigeria (NAN) reports that stakeholders within the Nigerian Electricity Supply Industry (NESI) have raised concerns about the implications of this reduction.
According to NERC, EERC does not have jurisdiction over electricity sourced from the national grid or from power stations established under federal law and licensed by NERC. It warned that such tariff reductions could distort market dynamics and jeopardise cost recovery mechanisms vital for sustaining the electricity sector.
“States must holistically incorporate the wholesale costs of grid supply without deviation in designing tariffs,” the commission said. “Alternatively, they must be prepared to provide subsidies to cover the difference between actual costs and reduced tariffs.”
NERC pointed out that the EERC’s Band A tariff was achieved by slashing the average generation cost from ₦112.60/kWh to ₦45.75/kWh—leaving a funding gap of ₦66.85/kWh, implicitly requiring a subsidy.
The commission emphasized that both NERC and state regulators have statutory responsibilities to preserve the integrity of Nigeria’s electricity market and avoid actions that could financially destabilize the system.
While acknowledging EERC’s role as a sub-national regulator, NERC reaffirmed that it retains oversight of electricity generated and transmitted through national infrastructure. It also disclosed that it is engaging EERC on clarifying misunderstandings related to tariff setting and cost structures.
NERC concluded by assuring stakeholders of its commitment to upholding the legal and financial structure of the electricity market in accordance with national laws.
