The Federal Government has issued a strong warning to electricity distribution companies (Discos) in Nigeria, urging them to respect the authority of state electricity regulatory commissions. This directive comes amid a growing tariff dispute that risks destabilizing the nation’s power sector.
The controversy escalated when the Enugu Electricity Regulatory Commission (EERC) unilaterally reduced the Band A electricity tariff from ₦209 per kilowatt-hour (kWh) to ₦160/kWh, effective August 1, 2025. Discos immediately opposed the move, citing losses that could exceed ₦1 billion monthly and warning that such actions might severely impair the power sector’s liquidity and market stability.
In response, the Nigerian Electricity Regulatory Commission (NERC) reaffirmed that state regulators do not hold jurisdiction over electricity supplied via the national grid. NERC emphasized that tariffs must account for the full wholesale costs of generation, transmission, and other legacy financial obligations. The agency also warned that state-level tariff reductions risk distorting the electricity market unless backed by subsidies and coordinated through established frameworks .
Power generation and distribution operators, represented by the Association of Nigerian Electricity Distributors (ANED) and the Association of Power Generation Companies (APGC), echoed these concerns. They stressed that uncoordinated tariff cuts could deepen financial shortfalls and disrupt ongoing improvements in supply. Their warnings underscore the fragility of NESI’s liquidity and the importance of maintaining cost-reflective pricing.
State officials, including members of the Forum of State Commissioners for Power and Energy in Nigeria (FOCPEN), defended their actions. They argued that the Electricity Act 2023 empowers state regulators to manage electricity tariffs within their jurisdictions and that their recent tariff review was based on thorough cost assessments tailored to Enugu’s local market dynamics.
The Minister of Power, Adebayo Adelabu, called for collaborative dialogue between state regulators, NERC, and Discos. He emphasized that while states have the right to manage their markets, interventions must align with federal oversight to preserve grid integrity and investor confidence in the interconnected national electricity system.
In summary, the Federal Government’s caution signals a call for unity and coordination in tariff policymaking. Unsettled power over tariff authority could disrupt market stability, strain liquidity, and impede power sector reform efforts.
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