Nigeria has commenced the decentralisation of its electricity sector following the implementation of the Electricity Act 2023, with an increasing number of states taking control of their local power markets and regulatory processes. This shift means that electricity consumers in participating states will no longer direct complaints to the Nigerian Electricity Regulatory Commission (NERC), but instead to state-level regulators established to oversee electricity generation, distribution, and consumer protection within their jurisdictions.
Transition of Regulatory Oversight
In a public notice detailing the transition, NERC stated that states which have completed the required legal and regulatory steps would assume responsibility for electricity regulation within their territories. This includes handling customer complaints such as disputed bills, metering delays, and service failures by distribution companies. States that have moved into the new framework include Lagos, Ogun, Oyo, Enugu, Ekiti, Ondo, Imo, Edo, Kogi, Niger, Plateau, Abia, Nasarawa, and Bayelsa.
Legal Basis for Decentralisation
The Electricity Act, signed into law in 2023, removed electricity from the exclusive legislative list, allowing state governments to generate, transmit, and distribute electricity within their borders. It also mandates states to establish independent regulatory commissions to manage licensing, tariffs, and consumer protection. NERC has indicated that it will transfer regulatory oversight of intrastate electricity markets to states that meet the legal requirements, while retaining authority over interstate electricity operations and the national grid.
State-Level Implementation
“For states that have enacted their electricity laws and established regulators, the commission will cede regulatory oversight of intrastate electricity markets,” NERC said in a statement on the implementation of the Act. In Enugu, the state government announced the operationalisation of its electricity regulatory commission, formally taking over responsibilities previously handled by NERC. Similar steps have been taken in Lagos and other states that have passed electricity laws in line with the Act.
Impact on Consumers
The reform changes how consumers seek redress. Residents in affected states are now required to report complaints directly to their state regulators, which serve as the primary point of contact for issues involving distribution companies. This is expected to streamline complaint resolution and improve accountability at the local level.
Broader Sector Reforms
Nigeria has long faced electricity supply constraints, with generation and distribution challenges limiting access to reliable power. The decentralisation policy is part of broader efforts by the federal government to restructure the sector and improve service delivery by allowing states to develop their own electricity markets. NERC said it would continue to oversee cross-border electricity transactions and ensure national standards are maintained as the transition progresses.
This move marks a significant shift in Nigeria's electricity governance, empowering states to tailor solutions to their unique energy needs while fostering competition and investment in the power sector.
