A brewing storm is shaking Nigeria's power sector, pitting state regulators against established electricity distribution companies (DisCos) in a fierce battle over tariffs. This clash, detailed in an editorial from November 3, 2025, reveals deep divisions and raises critical questions about the future of electricity regulation in the country.
The core of the conflict revolves around the Electricity Act 2023, which shifted the power landscape from a centralized model to a federalized one. The Enugu Electricity Regulatory Commission (EERC) ignited the controversy by introducing a lower Band A tariff of ₦160/kilowatt-hour for its customers, a significant reduction from the ₦209/kilowatt-hour charged by DisCos nationwide.
But here's where it gets controversial: The old DisCos, accustomed to the centralized system, strongly opposed the move, sparking a tariff war. The Nigeria Electricity Regulatory Commission (NERC) initially sided with the DisCos, but later attempted to mediate peace between the two parties. A crucial meeting to address the issue was scheduled for Lagos.
At the heart of the dispute lies a fundamental disagreement between 'electricity centralists' and 'federalists.' The Forum of Commissioners for Power and Energy in Nigeria (FCPEN), representing the federalist perspective, argues that state regulators have the authority to set tariffs within their jurisdictions, as granted by the Electricity Act 2023.
Conversely, the DisCos, operating under the old centralized model, insist that states cannot dictate tariffs for electricity sourced from the national grid. They argue that until states can independently generate, transmit, and distribute their own power, they are not in a position to set tariffs, as this would disregard the associated costs and subsidies.
Adding fuel to the fire, Dr. Sam Amadi, former NERC chair, expressed skepticism about the state regulators' capacity, citing a lack of technical expertise and experience. He accused the Federal Government of a hasty decentralization without adequately considering the states' capabilities. Is this a fair assessment, or does it reflect a resistance to change?
Sunday Oduntan, the outspoken spokesperson for the Association of Nigerian Electricity Distributors (ANED), echoed these concerns, warning that slashing tariffs without accounting for the full cost of production would cripple the market. He emphasized that if a tariff falls below the cost price, the company will inevitably collapse. Is Oduntan's warning justified, or is it a tactic to protect the DisCos' interests?
However, the EERC defended its decision, claiming that its tariff calculations accounted for all costs, including the full cost of power from the national grid. Despite NERC's initial disagreement, the commission has since adopted a mediating role.
Despite the heated arguments, the editorial points out a crucial fact: centralized regulation has failed to solve Nigeria's electricity problems, which is why the Electricity Act 2023 was introduced. The editorial emphasizes the importance of accurate costing for a sustainable market.
The article highlights a specific incident where the Enugu DisCo allegedly forced customers to revert to the higher tariff by reducing electricity supply to the local DisCo. This raises questions about the tactics employed by some DisCos. NERC is urged to facilitate a workable transition, encouraging collaboration between state regulators and DisCos.
Do you think the federalization of the electricity market is the right move?
What role should NERC play in this transition?
How can the balance between cost recovery and affordable tariffs be achieved?
