NERC Transfers Electricity Market Regulation in Enugu to State Commission

NERC transfers regulatory oversight of Enugu's electricity market to state-owned EERC, marking a shift towards decentralized energy regulation in Nigeria.

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NERC Transfers Electricity Market Regulation in Enugu to State Commission

NERC Transfers Electricity Market Regulation in Enugu to State Commission

The Nigerian Electricity Regulatory Commission (NERC) has transferred regulatory oversight of the electricity market in Enugu State to the Enugu State Electricity Regulatory Commission (EERC), effective May 1, 2024. This marks the first time NERC has ceded such authority to a state-owned regulatory body.

The transfer was made possible by amendments to Nigeria's constitution in March 2023, which removed power generation, transmission, and distribution from the exclusive legislative list. Under the new legal framework, states have the responsibility to manage and regulate their electricity markets, while NERC retains its role as the central regulator for inter-state and international electricity transactions.

In compliance with the amended Constitution and the Electricity Act 2023, the Enugu State Government enacted the Enugu State Electricity Law and constituted the EERC, led by Chijioke Okonkwo, in 2023. The state formally notified NERC of its processes and requested the transfer of regulatory authority over electricity operations in Enugu to the EERC.

As part of the transfer order, NERC has directed the Enugu Electricity Distribution Company (EEDC) to incorporate a subsidiary, EEDC SubCo, to assume responsibilities for intrastate supply and distribution of electricity in Enugu State. EEDC SubCo must apply for and secure a license for intrastate electricity supply and distribution from EERC. The transfer process is scheduled for completion by October 22, 2024.

Under the new regulatory structure, EERC holds the exclusive power to set and adopt end-user electricity tariffs within Enugu State. However, NERC will still approve tariffs for electricity sourced from grid-connected plants and related contracts.

Why this matters: The devolution of regulatory powers to states like Enugu represents a significant shift towards a more localized management of electricity services in Nigeria. This move aims to enhance efficiency and responsiveness by aligning regulatory oversight more closely with local needs and conditions, potentially serving as a model for other states in the federation.

In an official statement, NERC Chairman Sanusi Garba emphasized that "this transition represents a significant shift in Nigeria's approach to energy regulation, potentially serving as a model for other states in the federation." The successful implementation of this transfer in Enugu State could lead the way for similar regulatory reforms in other states, ultimately leading to a more decentralized and adaptive electricity market in Nigeria.

Key Takeaways

  • NERC transfers regulatory oversight of Enugu electricity market to state-owned EERC.
  • Constitutional amendments in 2023 allow states to manage and regulate their electricity markets.
  • EEDC to incorporate subsidiary EEDC SubCo for intrastate electricity supply and distribution.
  • EERC holds exclusive power to set end-user tariffs, while NERC approves grid-connected tariffs.
  • Devolution of regulatory powers aims to enhance efficiency and responsiveness to local needs.