The Nigerian Electricity Regulatory Commission (NERC) has faulted the decision of the Enugu State Electricity Regulatory Commission (EERC) to reduce Band A Tariff from ₦209/kWh to ₦160.4/kWh.
NERC warned EERC and other states against implementing independent tariff structures that could destabilise the country’s electricity market.
In a public notice released Thursday night, NERC acknowledged that the 2023 Electricity Act grants states regulatory powers over electricity in their jurisdictions. However, the Commission emphasised that such powers do not override federal legislation passed by the National Assembly, especially when national infrastructure and markets are involved.
The warning follows the Enugu State Electricity Regulatory Commission’s (EERC) controversial move to slash tariffs for Band A customers in the state from ₦209/kWh to ₦160.4/kWh. The decision has triggered confusion within the sector over how the resulting financial shortfall will be addressed and who will shoulder the burden.
According to NERC, the revised tariff in Enugu was based on a drastic reduction in the average generation tariff, from ₦112.60 to ₦45.75 per kWh, with an assumed subsidy component of ₦66.85. This, NERC warned, violates market cost-recovery principles and could lead to distortions across the national electricity supply chain.
“As states do not have jurisdiction over the national grid and power stations established under federal laws, they must holistically incorporate wholesale costs in designing tariffs,” the Commission said.
NERC reminded all stakeholders that Section 34(1) of the Electricity Act places a statutory obligation on it to preserve market stability and ensure efficient resource utilisation. It added that even sub-national regulators, such as EERC, share a similar obligation under their respective laws.
“Neither NERC nor EERC would take decisions that expose the national grid and wholesale electricity market to a financial crisis,” the Commission stated.
Responding to growing public concern over EERC’s Tariff Order No. EERC/2025/003, NERC confirmed it is actively engaging with the Enugu regulatory body to clarify areas of misinterpretation, particularly on the implications of sourcing power from the national grid.
While reaffirming its support for the decentralised electricity regime introduced by the 2023 Act, NERC insisted that cost-recovery must remain central to tariff policy across all tiers of government.
“The electricity market will be made whole in terms of cost recovery in compliance with the laws of the Federal Republic of Nigeria,” the Commission concluded.
