The Nation Newspaper

Tag: Electricity

  • Only state can make laws on electricity, says Enugu commission

    Only state can make laws on electricity, says Enugu commission

    The Enugu State Electricity Regulatory Commission, EERC, has declared that only state can make law to regulate electricity distribution.

    The agency stated this in its response to  the Public Notice issued by the National Electricity Regulatory Commission, NERC, questioning its power to slash tariff in its coverage area.

    The EERC slashed Band A customers tariff from N209/kWh (per kiloWatt) to N160 kWh, effective from August 1.

    EERC said that the Public Notice issued by NERC on Thursday arose mainly from “misconceptions and misplaced focus,” arising from the failure of some industry stakeholders to understand the fundamental changes introduced into the power sector through the 2023 constitution amendment, passage of the Electricity Act 2023, and emergence of the sub-national electricity market.

    EERC made the clarification in a statement on its website published yesterday.

    It said: “The question is whether in a fully decentralised Electricity Supply Industry, multiple tariff regimes are not reasonably possible? 

    “Furthermore, where a state like Enugu has assumed full regulatory oversight over its intrastate market, is it precluded from issuing a Tariff Order for that market?”

    EERC added that while NERC referenced relevant provisions of the constitution to highlight the powers of the National Assembly and the House of Assembly to make laws on the sector,  the federal agency “left out the fact that the National Assembly is not authorised to make laws on the matter of distribution of electricity.”

    “On this constitutional matter, it should be noted that under Paragraph 14(b) of Part II of the Second Schedule to the Constitution, only States have the constitutional right to make laws with respect to the distribution of electricity.

    “By virtue of Paragraph 13 of the Part II of the Second Schedule to the Constitution, the National Assembly is restricted to making laws with respect to ‘the generation and transmission of electricity in or to any part of the Federation and from one State to another State’. Electricity distribution was deliberately excluded,” the state agency maintained.

    EERC also said that NERC’s declaration that states 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” or be prepared to intervene by way of subsidy as a misapplication of NERC’s authority over the national grid.

    “The jurisdiction over the national grid and generating plants licensed by NERC is distinct and separate from benefits under the electricity subsidy programme of the Federal Government.

    Read Also: Nwifuru suspends 87 senior Ebonyi officials for snubbing state function

    “The question whether states that have established their electricity markets should benefit from the electricity subsidy programme is an issue of constitutional importance.

    “In a federation such as Nigeria, it does not lie with NERC to make this determination as it summarily declared in the Notice. The subsidy programme is funded from the Federation Account established under section 162 of the Constitution. This account belongs to the three tiers of government in Nigeria and benefit therefrom is determined by the Constitution.

    “To suggest that a state could be denied a benefit from the Federation Account, such as the electricity subsidy programme, because that state has exercised its constitutional right to establish a sub-national electricity market will be subversive of the Constitution.

    “The unstated aim of the Notice seems to be all about preserving for NERC the exclusive right to determine end-use tariffs in the NESI, and for the states to simply adopt and apply them, notwithstanding the provision of their State laws.

    “Under this arrangement, States that accept this usurpation will continue to enjoy the national subsidy on the generation tariff. And the States that do not will be denied the benefit, and told that they could go and generate their own electricity, even though the SubCos are entitled to a share of the Successor DisCos’ minimum offtake obligation from the grid,” EERC argued.

    EERC faulted NERC’s claim that its new Tariff Order was arrived at “largely by reducing the current average Generation Tariff of N112.60 per kWh to NGN45.75 per kWh with an assumption of subsidy component, a difference of N66.85 per kWh.”

    “EERC states unequivocally that the reduction in the tariff for Band A customers under the Tariff Order was not based on any populist sentiment, or reckless bluster. Rather, it is a result of a rigorous and transparent process of tariff determination during which costs and other relevant data from MainPower Electricity Distribution Company Limited were carefully reviewed and analysed based on the provisions of the Enugu State Electricity Law 2023, and EERC’s Tariff Methodology Regulations 2024,” it concluded.

  • ANED raises concerns over tariff slash  by Enugu Electricity Regulatory Commission

    ANED raises concerns over tariff slash  by Enugu Electricity Regulatory Commission

    The Association of Nigerian of Nigerian Electricity Distributors has raised concerns over recent tariff reduction by Enugu State Electricity Regulatory Commission (EERC).

    The association, in a statement signed by the MD/CEO Barr. Sunday Oduntan, said the tariff reduction by  EERC to ₦160/kWh for Band A customers in Enugu State, without adequate coordination with NERC and or other market participants raises significant concerns for the stability and liquidity of the Nigerian Electricity Supply Industry (NESI).

    The statement said: “Since the release of the Tariff Order by EERC for Enugu State residents, the Electricity Distribution Companies (Discos) in other States have come under intense pressure and scrutiny to also reduce tariffs, while some customers have taken a position that they will no longer pay their electricity bills until tariffs are reduced.

    “Permit us to establish the fact that as service providers, it is our hope and desire that electricity tariffs at some point should begin to come down with time. It is not our intention to make life difficult for our loyal customers, and we have been aligning with the Federal Government to ensure provision of stable power supply. However, the cost reflective tariff is as a result of the economic realities of our nation.

    We note that one of the principles adopted by EERC is to place reliance on the Policy of the Federal Government on electricity subsidies to enable them crash Band A Tariffs.”

    The statement added:  “While Discos are not opposed to subsidies in principle, we strongly emphasize that subsidies must be transparently structured and promptly funded. Delayed or unfunded subsidies create cashflow disruptions, undermine market confidence, and deepen the existing liquidity crisis across the electricity value chain.

    Read Also: Education under Renewed Hope Agenda undergoing transformation – Shettima

    In a clear position, the Federal Government through the Honourable Minister of Power, Chief Bayo Adelabu has stated that States slashing power tariff must be ready to pay subsidy, and be accountable for the financial implication.

    “It is already a fact today that the delay in the prompt payment of electricity subsidies has put the generation companies and gas suppliers under severe operational burden due to the almost N5 trillion outstanding to these market participants. It is important to stress that the Nigerian power market, in the short term, remains largely centrally coordinated, especially for Bulk energy purchases, Transmission, and market settlements involving Generation Companies (GenCos) and the Nigerian Bulk Electricity Trading Company (NBET). We duly recognise changes in law and regulation that now permits States to set up their electricity markets. However, any State-level policy action such as uncoordinated tariff reductions that does not align with market-wide cost-recovery mechanisms will inevitably result in shortfalls in Disco remittances to the market below their current Distribution Remittance Obligations, thereby putting GenCos and other upstream service providers at further financial risk. We understand further that the Federal Government does not have an elastic subsidy budget. Any tariff reduction following the approach adopted by EERC may further bloat the subsidy obligations of the federal government. We believe that the Federal Ministry of Power and the Nigerian Electricity Regulatory Commission (NERC) would be watching closely to provide guidance and align State and Federal objectives to ensure electricity access is accelerated in a sustainable and affordable manner.”

    The ANED boss noted that the above budgetary constraints apply to the States too, adding “most cannot afford to make direct budgetary provisions for subsidies especially in the face of rising governance costs and the harsh operating environment. This underscores the importance of collaboration and a well coordinated market driven approach on tariff related matters. To sustain investments and improve service delivery, Discos therefore reiterate the need for: • Stronger coordination between Ministry of Power, State Regulators and NERC to ensure consistency in Policy and Rate design to avoid market distortion. • A clear subsidy framework that is transparent, targeted, and fully funded. • Timely disbursement of subsidy payments to enable prompt settlement of market invoices and improve market liquidity. While the goal of making electricity more affordable is shared by all, it must be pursued in a manner that preserves the financial health of the market, encourages long-term investment, and avoids policies that could erode progress toward stable, reliable electricity for Nigerians. The Association remains committed to advocating for a financially sustainable and customer  responsive electricity sector in Nigeria.”

  • Osun court acquits ex-NMA chairman of electricity meter theft

    Osun court acquits ex-NMA chairman of electricity meter theft

    A magistrate’s Court sitting in Osogbo, Osun State, has acquitted the former Chairman of the Nigeria Medical Association in Osun State, Dr. Olajumoke Tokunbo Olumide, of the electricity meter theft charge against him

    Olumide was arraigned by the Osun Police Command on four counts at Chief Magistrate’s Court 6 presided over by Magistrate A.A Adeyeba in 2021, and was granted bail.

    He was later re-arraigned before Magistrate’s Court 2 presided over by Magistrate Muhibah A.Olatunji on January 17, 2022.

    The prosecution team, led by Elisa Olusegun, told the court that Olajumoke stole a Digital Postpaid Meter with number 14313649, valued at N250,000, property of the Ibadan Electricity Distribution Company (IBEDC), installed to capture the exact electricity consumption at his hospital at Ogo-Oluwa area in Osogbo, the state capital.

    Read Also: Education under Renewed Hope Agenda undergoing transformation – Shettima

    The prosecutor also told the court that Olajumoke conducted himself in a manner capable of causing breach of peace by deliberately using his grey coloured Hyundai vehicle with number plate RSH-205 BF Abuja to obstruct IBEDC’s operation vehicle, among other offences punishable under the law.

    But the defence counsel, Kazeem Sulaiman, told the court that the charges against Olajumoke were unfounded, baseless, frivolous and unimaginable.

    Sulaiman said that Olajumoke is a very reputable senior medical expert who has contributed significantly to society and could not descend so low to commit the alleged offences.

    In her ruling, Magistrate Muhibah A.Olatunji dismissed all four counts against Olajumoke for lacking merit and thereby discharged and acquitted him.

  • How to solve lingering electricity challenge, by Onafowokan

    How to solve lingering electricity challenge, by Onafowokan

    The Federal Government needs to unbundle the Transmission Company of Nigeria (TCN) and encourage localised approach to the upgrade and management of the national grid to halt the incessant collapse of the power grid and guarantee substantial improvement in electricity supply across the country.

    Managing Director, Coleman Wires and Cable Industries Limited, Mr. George Onafowokan, who made this known, also said increased investments in the nation’s power transmission and distribution infrastructure and more competition in the sector will solve Nigeria’s perennial electricity problems.

    Onafowokan traced the persistent crisis in the Nigerian Electricity Supply Industry (NESI) to the Federal Government’s privatisation of the generation and distribution sub-sectors in 2013, leaving the transmission sub-sector, managed by TCN, under government control.

    In November 2013, the defunct state-owned Power Holding Company of Nigeria (PHCN) was unbundled, leading to the creation of 11 Distribution Companies (DisCos), six Generation Companies (GenCos), and a transmission company (I.e. TCN).

    But speaking with The SNation, on the sideline of a press conference ahead of the golden jubilee celebration of Coleman Wires and Cable Industries Limited in October 2025, Onafowokan described TCN’s isolation from the privatisation as “an error.”

    Read Also: Electricity workers call for transparency in TCN unbundling

    “TCN should have been dismantled immediately. The government has to unbundle TCN,” he said, adding that TCN, apart from remaining a government-owned agency that manages the electricity transmission network, also stopped investing.

    “We have so much to generate which have become private. Majority of the GenCos have been sold, the DisCos have been sold. The TCN that takes the generation and sends it to the distribution is one government agency that also for 20 years did not invest,” Onafowokan said.

    He also said the nation’s transmission infrastructure is outdated and expired. “The reality is that our transmission line has expired. More than 57 per cent of our transmission has expired,” the Coleman MD stated.

    According to him, this contributes to the frequent collapse of the national grid, which results in widespread power outages that cause significant disruptions to businesses and the economy.

    Explaining how expired transmission line results in frequent grid collapse, Onafowokan said: “What happens is that every cable you put on those high tension, the ones on the pylons that are transmitting at long distance, they have a shelve life of about 30 years, maximum 40 years.

    “But because they are expired, you can’t pass the same load current anymore, because if you pass the same load current through them, the heat will make those cables crack and bend. So, at that moment, you have the national grid collapse.”

    Onafowokan, while emphasising that many cables in use today are no longer fit for purpose, resulting in frequent grid failures, however, said local solution to upgrading the nation’s critical power infrastructure will halt incessant grid collapses in Nigeria.

    He said Coleman Wires and Cable Industries Limited, which is the largest cable manufacturer in West Africa, is into power cables, able to offer all the cables that are required to power a modern day distribution and transmission network.

    “We are able to offer those cables in-country for your injection sub-stations, for your power lines, for your transmission lines. You don’t have to wait for anybody from outside to come and help us with that.

    “We are hoping that we can continue to work with the distribution companies and the government, and policy support to be able to make this thing (grid collapse) a thing of the past,” he stated, expressing regrets that despite being a cable manufacturer, TCN has never patronized his company in the past 20 years.

    Onafowokan words: “In the last 20 years, I barely see what cable TCN has bought from me. So, I don’t even know what they are doing. So, if me that is supposed to be making the biggest amount of cables that TCN uses in this country cannot even see one per cent business from them, then I ask what are they are doing?”

    The other led of the error in the power sector privatisation exercise in 2013 that threw the NESI into crisis, according to the Coleman boss, is that private investors who bought the power assets “jumped at them without actually checking what they were buying.”

    The handover of the 18 successor companies from the defunct state-owned PHCN to private investors under the privatisation exercise was supposed to help bring about efficient service delivery.

    It was expected to set the stage for a major transformation of the power sector to guarantee uninterrupted electricity supply to the manufacturing sector and Nigerians in general.

    The Bureau of Public Enterprises (BPE), which midwifed the privatisation exercise, projected that the private investors who bought 60 per cent shares in the power assets would increase electricity generation capacity to 20,000 megawatts by 2018, and 40, 000MW by 2020.

    Sadly, however, none of these deliverables has come the way of Nigerians 12 years after, with Onafowokan noting that most of the private investors that bought the assets, including the banks that financed them, did not know what they were buying.

    He described it as “politically motivated buying” and “a financial disaster,” especially for banks that put money into it.

    He said this is why some of the banks have gone to court to take over the DisCos to try and recover their money, because “at the end of the day, its depositors’ funds. The banks are not charity.”

    Onafowokan also said the failure of the privatisation exercise to open the gate for competition contributed in creating the problem the NESI has today. “You turn a government monopoly that didn’t work into a private monopoly and expect miracle,” he stated.

    He faulted the use of the telecommunications sector to compare what is happening in the power sector. “You cannot use MTN, NITEL, Airtel, Glo as example, because it was a level playing ground. NITEL in those days did not even have 100, 000 lines. But when competition came, everything changed.

    “Even MTN told us we cannot get per second billing, but Glo came from day one and started per send billing, and something they told us two years ago happened overnight. So, the reality is that the error in the power sector started from day one when competition wasn’t allowed,” Onafowokan said.

    Also speaking, the Executive Director, Coleman Wires and Cable Industries Limited, Mr. Michael Onafowokan, said the original plan of privatisation was to bring in new investments to expand the grid and take power to the various centres across the country.

    He, however, regretted that since the private sector took over, “we are seeing a lower level of investment than what it ought to be to be able to keep up with the pace of development of the country as a whole. The rate of grid expansion has not matched the rate of growth.”

    The Coleman Executive Director, while stressing the need to bolster the distribution side to match the rate of growth, pointed out that “at the moment, we are way behind; we are generating 6, 000MW where we need close to 150, 000MW to run the country.”

    He said if Nigeria is at 6,000MW and needs 150, 000MW, the country should develop infrastructure or a pathway that will add 20,000MW annually over the next five years to get to where it needs to be.

    While insisting that infrastructure is the major cause of the continuous breakdown of the grid, he reiterated that “Investment has been very slow. We need a lot of direct investments either through those companies directly or through government to ensure that we get whatever we generate in full to the people.”

    Meanwhile, the Federal Government, last week, said it was banking on improved management of the national grid by the Nigerian Independent System Operator (NISO) to increase electricity supply to 8,000MW within the next 12 to 18 months.

    BPE Director General Mr. Ayodeji Gbeleyi, at a leadership retreat to onboard NISO’s top management in Abuja, said although Nigeria’s installed generation capacity exceeds 14,000MW, actual daily output has hovered around 5,500MW.

    He emphasised that with more efficient grid operations and increased investments in transmission and distribution infrastructure, the power sector is poised for substantial improvement.

    “Currently, about 5,500MW of power is being wheeled daily, compared to a nameplate generation capacity of over 14,000MW. With the right investments and enhanced grid resilience, it is realistic to project a 50 per cent increase in supply within 12 to 18 months,” Gbeleyi said.

  • Electricity workers call for transparency in TCN unbundling

    Electricity workers call for transparency in TCN unbundling

    Electricity workers have called for transparency in the unbundling of the Transmission Company of Nigeria (TCN) into TCN and NISO, warning that while doing so pitfalls in the sector’s previous privatisation should be avoided.

    President-General, Senior Staff Association of Electricity and Allied Companies (SSAEAC), Chika Benedict, gave the advice during the association’s sixth Triennial National Delegates Conference in Lagos.

    Benedict, who recalled the association’s position, disagreed with the government on the move, saying the union would rather solicit an improvement in funding.

    He said the union drew the Federal Government’s attention to the last privatisation of Power Holding Company of Nigeria (PHCN) infrastructure that has yielded little or no dividends to Nigerians.

    The SSAEAC chief said the union demanded that TCN be allowed to remain, while efforts were geared to improve the facilities and make them more efficient.

    According to him, “This was to avoid the danger of falling into the same trap of establishing inefficient companies, as we are experiencing with the companies in the sector. Let it be on record that our advice to the government was rejected.”

    Benedict faulted the Nigerian Electricity Regulatory Commission (NERC) for allegedly strangulating the generating companies (GenCos) and distributing companies (DisCos) electricity companies’ finances through the withdrawal of substantial capital expenditure (CAPEX), leaving the operators handicapped.

    While addressing regulatory bottlenecks in the sector, Benedict said: “If we have to be in business, the cost of production must be recouped. The problem is with the NERC. The regulators have overdrawn so much money from these companies in the name of CAPEX, and these companies are left with barely nothing to run their businesses, and we frown at it. NERC should retrace its steps before it is too late.

    Read Also: Firm hosts stakeholders to improve electricity

    “I do not see reasons NERC officials will earn so much, and the companies generating and transmitting electricity have nothing. I am using this medium to tell the government what is happening in NERC. These regulators are strangulating these companies, and we are going to come up with more official communique soon, but we are warning them to retrace their steps because the consequences of what they are doing will befall this nation.”

    On members’ welfare, Benedict described the union’s resilience in the face of financial constraints and policy disruptions in the sector, noting that through prudent management, the association has preserved its assets and ensured SSAEAC remains a strong voice for its members. He credited his administration for fostering internal unity, expanding revenue streams, and re-engaging critical stakeholders following years of institutional discontent.

    In a goodwill message, President-General, Trade Union Congress of Nigeria (TUC), Festus Osifo, who was represented by the General Secretary, Nuhu Toro, reiterated the congress’s call for improved job security, social protection and equitable economic policies for  workers. Osifo also weighed in on national wage concerns, warning that the newly approved N70,000 minimum wage has already been decimated by runaway inflation and the soaring cost of living.

  • Firm hosts stakeholders to improve electricity

    Firm hosts stakeholders to improve electricity

    Manufacturer of power, Tide Power, has held a stakeholders seminar in Lagos.

    The  session brought together  experts from Tide Power to share insight  on the energy challenges and introduce  products that  align with global clean energy standards.

    Nigerian branch General manager, Fred Shu, said: “For more than 10 years, we have been doing business in Nigeria. But we moved to Nigeria seven years ago… Gas is in huge demand. Our business focus is on dieselgas and biogas generators, and integrated green energy solutions. We are a professional energy solution provider. We have installed an IPP power of almost about 40 megawatts of gas in Benin, Nigeria.We also have a factory in Lagos with spare parts.”

    Read Also: FG pledges steady electricity supply to military bases

    Deputy General Manager, Michael Luo, noted: “Since we started to manufacture here, we have been offering our services to Nigerians. Many  still use our high power products since seven years ago because of their high quality. These are products everybody now use, including Nigeria, which promotes clean energy.”

    Established in Hong Kong, Tide Power manufactures power systems, specialising in dieselgas generators and integrated green energy solutions.

    Tide Power has four production bases in United Kingdom, China, Saudi Arabia and Nigeria.

  • The $200 billion quest for reliable electricity

    The $200 billion quest for reliable electricity

    • By Elvis Eromosele

    Sir: Nigeria is an energy starved nation. Today, homes flicker into darkness, businesses grind to a halt, and dreams of economic growth stall in the face of an unreliable electricity grid. The numbers paint a grim picture. Nigeria generates a mere 6,000 megawatts (MW) of electricity against an estimated demand of 40,000 MW needed for a stable, nationwide supply.

    The World Bank estimates this power deficit costs the economy $29 billion annually, an economic haemorrhage that highlights the urgency of reform. This may explain why Adebayo Adelabu, Minister of Power, laid out a bold vision: a $200 billion investment over 20 years to deliver a 24/7 electricity supply. This staggering figure, $10 billion a year, has sparked both hope and scepticism. Can Nigeria transform its beleaguered power sector, and what will it take to light up the nation?

    Nigeria’s power crisis is a hydra-headed beast. The issues span generation, transmission, and distribution. The national grid, a relic of decades-old infrastructure, is plagued by inefficiencies. Reports indicate that for every 100 MW generated, 7.79 MW is lost in transmission, a figure that reflects both technical shortcomings and systemic neglect. Vandalism compounds the problem. Indeed, between January 2022 and October 2024, the government spent ₦29.3 billion (roughly $17.7 million) repairing 266 vandalised electricity towers, an average of $66,500 per tower. These fixes however are mere Band-Aids on a system that demands a full overhaul.

    The human toll is palpable. In Lagos, small businesses and homeowners alike are compelled to rely on costly petrol/diesel generators to keep their machines/households humming. Many businesses spend more than half of their earnings on fuel. Across rural Nigeria, entire communities remain off the grid, their potential stifled by darkness.

    The metering gap, less than half of customers have metres, further complicates matters, leading to estimated billing and revenue losses for distribution companies and discontent from electricity consumers. These challenges are not new, but the scale of the solution proposed is unprecedented.

    Read Also: Tinubu’s reforms boosting Nigeria’s economic recovery – FG

    The $200 billion goal is ambitious. It seeks to achieve a generation capacity of 88,000 MW, enough to ensure uninterrupted electricity nationwide by 2045. This figure encompasses upgrades across the entire value chain, generation, transmission, and distribution. It also accounts for the integration of renewable energy, grid modernisation, and policy reforms to attract private investment.

    Breaking down the numbers, the plan allocates significant funds to each segment. Transmission infrastructure, for instance, requires a massive investment. The Presidential Power Initiative, launched to modernise the grid, has already committed $1.9 million and €62.9 million in its first phase, boosting capacity by 2,000 MW. Yet, industry experts estimate that $100 billion over 20 years is needed just to maintain current service levels. Distribution upgrades, including metering initiatives, also demand substantial funding. The Nigerian Electricity Transmission Access Project (NETAP), backed by a $486 million World Bank credit, is a step toward addressing these gaps, but it’s a drop in the bucket compared to the broader need.

    So, while the government focuses on grid expansion, decentralised solutions like mini-grids and solar projects are gaining traction. In a country where vast rural areas remain unconnected, off-grid systems offer a lifeline.

    We can agree that the $200 billion price tag is daunting. But this is not just about money. Implementation efficiency, transparency, and anti-corruption measures are equally critical. Nigeria’s history of mismanaged projects looms large, with critics pointing to past initiatives that fizzled out despite hefty budgets. The truth is that the funds are one thing, but execution is another. Without accountability, $200 billion could vanish into thin air.

    Short-term goals offer a glimmer of hope. Experts estimate that $15-30 billion by 2030 could stabilise the grid, expand metering, and deploy more mini-grids. These steps wouldn’t deliver 24/7 power but could significantly reduce outages and connect millions more to electricity. For urban centres like Lagos and Abuja, grid upgrades could mean fewer blackouts. For rural areas, off-grid solutions could bridge the gap, promoting economic growth and improving quality of life.

    The stakes are high. A reliable power supply could unlock Nigeria’s potential, fuelling industries, creating jobs, and reducing poverty. The World Bank’s $29 billion annual loss estimate underscores the cost of inaction. Yet, the path to transformation is fraught with challenges, technical, financial, and political. As Nigeria grapples with its power crisis, the $200 billion question remains: Can the nation muster the resources and resolve to light up its future?

    •Elvis Eromosele,

    elviseroms@gmail.com

  • FG subsidised electricity with N536.40b in three months

    FG subsidised electricity with N536.40b in three months

    The Nigerian Electricity Regulatory Commission (NERC) has said the Federal Government subsidises energy supply to customers in with N536.40billion in the three months of the First Quarter of 2025 (Q1 2025).

    This was contained its Q1 2025 Report.

    The payment was due to lack of a cost reflective tariff in the Nigerian Electricity Supply Industry (NESI).

    NERC said: “It is important to note that due to the absence of cost-reflective tariffs across all DisCos, the Government incurred a subsidy obligation of ₦536.40 billion.

    The sum, according to the report, was 
    59.16% of total Nigerian Electricity Bulk Trading (NBET) invoice) in 2025/Q1. NERC noted that between  2024/Q4
    and 2025/Q1, the subsidy obligation of the government increased by ₦64.70 
    billion, from ₦471.69 billion (56.65% of the total GenCo invoice) to ₦536.40
    billion (59.16% of the total GenCo invoice). 

    The report explained further that the increase in the subsidy obligation is a result of the government policy to freeze allowed tariffs paid by customers despite the increase in the cost-reflective tariffs across the quarters.

    Read Also: 2023 Electricity Act will deepen energy access, economic drive in Niger – Santuraki

    It added that in the absence of cost-reflective tariffs, the Government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff 
    subsidies. 

    According to NERC, for ease of administration, the subsidy is only applied to the generation cost payable by DisCos to NBET at source in the form of a DisCo’s Remittance Obligation (DRO).

     The report reads in part: “The DRO represents the total GenCo invoice that is billed to the DisCos by NBET based on what the allowed DisCo tariffs can cover18.
    “Furthermore, DisCos are expected to remit 100% of the invoices received from the MO for transmission and administrative service costs. 
    “As explained in prior reports, the DRO regime replaced the Minimum Remittance Obligation19 (MRO) framework in January 2024, and DisCos are expected to pay 100% of their DROs. The transition to the DRO regime was necessitated by the risk of unpaid tariff subsidy debts encumbering the balance sheets of the DisCos, thereby preventing them from raising finance to undertake critical investments in their 
    distribution network. 
    “Thus, the portion of GenCo invoices not covered by DRO is the tariff subsidy which is invoiced directly to the Federal Ministry of Finance by NBET.”

  • Lagos to launch first subnational electricity market with unified plan

    Lagos to launch first subnational electricity market with unified plan

    Lagos State is set to make history as the first subnational entity in the country and among the few in Africa to establish a fully regulated, independent electricity market. 

    As part of a sweeping reform to overhaul its energy ecosystem, the state government is consolidating all its power-related policies into a single, integrated electricity strategy aimed at improving energy access, attracting investment, and accelerating development.

    Commissioner for Energy and Mineral Resources, Abiodun Ogunleye, made the announcement during the 2025 Ministerial Press Briefing held in Alausa, Ikeja. 

    The event was part of activities marking the second anniversary of Governor Babajide Sanwo-Olu’s second term in office.

    He said: “We are consolidating our energy frameworks into one cohesive document that will help to streamline implementation and drive strategic partnerships. This revised Integrated Resource and Strategic Plan will reposition Lagos as a hub for sustainable power solutions.”

    The new plan, Ogunleye explained, is not just an administrative update—it is a strategic roadmap that will guide both public and private sector investment across the electricity value chain. Once approved by the governor, the plan will serve as the blueprint for a transformative shift in how power is generated, distributed, and consumed in the state.

    Central to this transformation is the upcoming Lagos Electricity Market (LEM), a first-of-its-kind subnational energy market that will operate with its own regulatory framework. According to Ogunleye, LEM will be digitally powered to monitor power generation and consumption in real time, ensuring transparency, efficiency, and robust consumer protection.

    “The LEM will be powered by digital tools to monitor generation and usage in real time. This will ensure transparency, attract investors, and protect consumers,” he said.

    Read Also: Why increasing electricity tariffs won’t solve problem

    The launch of the LEM aligns with recent constitutional amendments that allow Nigerian states to independently regulate and manage electricity supply within their jurisdictions, a development Lagos is now poised to lead. Ogunleye said this move would create a favourable investment climate while ensuring the state’s growing population and industries have reliable access to power.

    “We want a policy environment that is not only investor-friendly but also serves the energy needs of Lagosians efficiently,” he added.

    In line with this, the state has signed a memorandum of understanding with the Federal Government to accelerate electricity access in underserved communities. Ogunleye described the partnership as a major milestone that will boost economic productivity and improve quality of life for many residents.

    He said: “This partnership with the Federal Government is a game-changer. It will deepen energy access and bring the much-needed power to more households and businesses across Lagos.”

    To complement its electricity reform agenda, the state is also expanding its focus on clean fuels. Ogunleye revealed that 65 vehicles were converted to run on compressed natural gas (CNG) in the past year, while the state-owned IBILE Oil and Gas sold over 100 million litres of petrol and 9.6 million kilograms of liquefied petroleum gas (LPG).

    “These figures show our commitment to cleaner energy and economic efficiency. Our gas initiatives are reducing emissions and saving costs for Lagosians,” he said.

    Efforts to localise power sector infrastructure are also underway. Ogunleye disclosed that the government is working with private sector players to begin local manufacturing of electricity infrastructure such as meters, transformers, cables, and switchgears. This, he said, would reduce import dependence, create jobs, and strengthen the local economy.

    Meanwhile, the ministry is also intensifying its crackdown on illegal mining activities, having intercepted 333 trucks at unauthorised sites and issued 23 stop-work orders in locations like Ikorodu, Epe, and Badagry.

    “These operations threaten not just our environment, but also the safety and livelihoods of our people. We are taking decisive action,” he remarked.

    With its sights set on a coordinated energy transition, the commissioner reiterated the state’s willingness to collaborate with the federal government and other subnational entities to build a robust, future-ready energy sector.

    “With these initiatives, Lagos is set to become the first sub-national in Nigeria and among the few in Africa with a fully regulated and independent electricity market,” he stated.

  • Lagos leads Nigeria’s power sector reform with new electricity law

    Lagos leads Nigeria’s power sector reform with new electricity law

    …says new law to revamp power supply, attract investment

    Lagos State has taken a pioneering step in Nigeria’s electricity reform landscape with the passage and implementation of the Lagos State Electricity Law, 2024, empowering the State to regulate its own electricity market, spanning generation, transmission, distribution, and trading of electricity.

    The landmark legislation, signed into law by Governor Babajide Sanwo-Olu in December 2024, establishes critical institutions that will drive the State’s power ambitions. 

    These include the Lagos State Electricity Regulatory Commission (LASERC), which will oversee licensing and market regulation; the Lagos State Electrification Agency (LSEA), tasked with expanding access to underserved communities; and the Lagos Independent System Operator (LISO), which will coordinate grid reliability and operations.

    Addressing journalists at the 2025 Annual Ministerial Press Briefing held at the Bagauda Kaltho Press Centre, Alausa, Biodun Ogunleye, Commissioner for Energy and Mineral Resources, said the law represents a turning point in Lagos’ power supply history and aligns with Governor Sanwo-Olu’s vision of a reliable, affordable, and sustainable electricity sector.

     “This bold step not only decentralizes power in Nigeria but positions Lagos as a leader in sustainable energy policy and delivery. The establishment of our own regulatory and operational electricity market will ensure energy sufficiency, reduce losses, and ultimately improve the quality of life for millions of residents,” Ogunleye said.

    Read Also: How Electricity Act 2023 is rewiring the troubled power sector

    He noted that LASERC has already commenced engagements with key stakeholders to license new market participants, including independent power producers (IPPs) and distribution companies (DisCos), which will operate under Lagos’ own regulatory framework. This development will help increase competition, attract private investment, and accelerate electrification.

    As part of the implementation of the new law, the Commissioner also revealed plans to establish the Lagos Electricity Market (LEM), a coordinated ecosystem that will support embedded generation, smart grid deployment, and consumer protection through data-driven oversight.

    “The LEM will be powered by digital tools to monitor power generation and usage in real-time. We will ensure transparency, promote investor confidence, and protect end-users,” Ogunleye added.

    He disclosed that the Ministry has commenced work on the Lagos Integrated Resource Plan (IRP) to provide a long-term roadmap for energy access and infrastructure development across sectors. In addition, eight new interconnected mini-grids are currently being deployed across underserved communities, with several others in the pipeline under a phased rollout strategy.

    Looking ahead, the Commissioner affirmed that the Ministry is exploring local manufacturing of electricity infrastructure such as transformers, meters, cables, and switchgears, through partnerships with private sector players, to drive job creation and reduce import dependence.

    Ogunleye also reiterated the State’s readiness to collaborate with the Federal Government and other sub-nationals to ensure a just and coordinated energy transition that benefits all Nigerians.

    With these bold initiatives, Lagos is well on its way to becoming the first sub-national in Nigeria, and one of the few in Africa, with a fully regulated and independent electricity market, delivering stable, scalable, and sustainable power for development.