THE Nigerian Electricity Regulatory Commission (NERC) has said that the Enugu Electricity Regulatory Commission (EERC) has no regulatory power to fix the electricity price when the power is generated and transmitted from the national grid.

NERC, an independent regulatory body with authority for regulating the electric power industry in Nigeria, clarified this in a statement released late on Thursday, July 24.

The body stressed that even though the 2023 Electricity Act gave states the power to regulate electricity in their domain, the power does not supersede that made by the National Assembly to regulate electricity in the federation.

“States do not have jurisdiction over the national grid and over electric power stations established under federal laws/operating under licences issued by the Commission; they must holistically incorporate the wholesale costs of grid supply to their States without any qualification or deviation in their design of tariffs for end-use customers in order not to distort the dynamics of the market or be prepared to make a policy intervention by way a subsidy for any deviation in the tariff structure that distorts the wholesale generation, transmission and legacy financing costs in NESI,” NERC stated.

On Sunday, July 20, the EERC announced a new electricity tariff order for the MainPower Electricity Distribution Limited (MEDL), successor to the Enugu Electricity Distribution Company (EEDC).

The new tariff expected to have taken effect from August 1, saw a reduction for Band A rate from N209 per kilowatt-hour (kWh) to N160/kWh.

It described the revised tariff as “cost-reflective” and expected to account for the federal government’s ongoing subsidy on power generation, to ensure consumers benefit from the government’s financial support.

In its statement, NERC addressed stakeholders’ concerns over the tariff order the EERC issued to its licensee, MEDL.

It said the Nigerian Electricity Supply Industry (NESI) stakeholders have expressed concern about the consequences of the reduction of tariffs for Band A customers in MEDL’s network area to NGN160.4 per kWh and the freezing of tariffs of customers in the other bands on the wholesale generation and transmission costs along with the financing costs for legacy obligations in NESI.

“It is pertinent to state that the NGN160.4 per kWh was arrived at largely by reducing the current average Generation Tariff of NGN112.60 per kWh to NGN45.75, with an assumption of a subsidy component, a difference of N66.85 per kWh.

“It added that Section 34(1) of the EA [Electricity Act] places a statutory obligation on the Commission to “create, promote and preserve efficient electricity industry and market structures, and ensure the optimal utilization of resources for the provision of electricity and we are also aware that EERC as a sub-national electricity regulator also has a similar statutory obligation in their enabling law, and neither NERC nor EERC as responsible regulatory institutions would take decisions that expose the national grid and wholesale electricity market to a financial crisis in contravention of express powers granted to them by the Constitution,” the NERC maintained.

The commission added that it is currently engaging EERC on their tariff order as it relates to any perceived area of misinterpretation/misunderstanding on wholesale generation and transmission costs on their import of power from the national grid and grants further assurances of its unwavering statutory commitment that the electricity market will be made whole in terms of cost recovery in compliance with the laws of the Federal Republic of Nigeria.

In June 2023, President Bola Tinubu signed the Electricity Act 2023 into law, repealing the Electric Power Sector Reform Act, 2005, The ICIR reported.

The Act empowers states to regulate electricity generation, transmission, and distribution activities.

Since the decentralisation of the power sector, over 16 states have begun to pass their electricity laws and set up state regulatory commissions.