The Nigerian Electricity Regulatory Commission (NERC) has ruled that the Enugu State Electricity Regulatory Commission (EERC) lacks the legal authority to unilaterally reduce electricity tariffs for power supplied through the national grid. According to a public notice issued by NERC, states do not have jurisdiction over power generated and transmitted from the national grid, and any deviation from approved tariffs must either reflect the full cost of supply or be backed by a state subsidy to avoid market distortion.
The clarification was prompted by controversy surrounding the EERC’s recent tariff order, which slashed rates for Band A customers in Enugu from ₦209/kWh to ₦160.4/kWh—citing assumed federal subsidies—while freezing rates for other customer bands. Electricity distributors and generation companies have strongly condemned the EERC’s move, warning that it could jeopardize cost recovery across Nigeria’s electricity value chain and worsen the liquidity crisis impacting power supply.
NERC emphasized that while the Electricity Act of 2023 grants states authority to regulate intra-state electricity markets, this does not extend to regulating tariffs for grid-supplied power governed by federal law and national standard-setting bodies. Any state-level deviation without adequate financial cushioning must be viewed as a policy subsidy rather than a legitimate tariff change. The commission has initiated engagement with the EERC to clarify misunderstandings and ensure compliance with national cost-recovery requirements.
This ruling sets the tone for Nigeria’s ongoing electricity market reform: while states are moving toward regulatory autonomy, they must harmonize with national tariff structures when interfacing with the grid. NERC’s intervention reaffirms its commitment to preserving system stability, protecting investor confidence, and preventing financial disruption in the nation’s electricity sector.
