The Federal Government has decided to halt the granting of autonomy over electricity regulation to state governments, opting instead to conduct a thorough review of this policy.
Power Minister Adebayo Adelabu noted that it seems state governments and other involved parties may not have a comprehensive understanding of the requirements for effectively running an electricity market.
In accordance with the provisions of the Constitution of the Federal Republic of Nigeria (CFRN) and the Electricity Act 2023, an order was issued to shift the regulatory supervision of the electricity market in Ondo, Ekiti, and Enugu states from the Nigerian Electricity Regulatory Commission (NERC) to the state electricity regulatory bureaux.
Adelabu suggested that it is important to review the policy to ensure that states and other regulators fully grasp the requirements for operating an electricity market.
He said, “We must tread carefully. We should not be in a hurry. The market is not a mature market; it is not mature enough,”
“With everything centralised for a single regulator, we have a myriad of issues. Now we tend to create a regulatory framework across 36 states, it is something that we must do in a highly systematic and strategic manner.”
“When we have each of these zones represented in the pilot and we allow it to run for three to six months or up to a year, all the possible issues would have been reflected so that we are going to have a learning curve, and all those issues will be addressed before granting further regulatory autonomy, because I have a feeling that we don’t have a comprehensive understanding of what this autonomy means.
“The fact that we gave a state regulatory autonomy does not mean that it’s just about distribution of electricity but it is regulation across the value chain: generation within your territory, transmission within your territory and distribution in your territory, including tariff setting.”
